The Tamil Nadu government and the Centre clash yet again, this time over the proposal to privatise the Salem Steel Plant (SSP). In a letter to Prime Minister Narendra Modi, Chief Minister Edappadi Palaniswami has opposed the move and said that it would cause 'considerable unrest' amongst people whose lands were acquired.
Salem Steel Plant, a unit of Steel Authority of India Ltd (SAIL), had been making losses for almost five years, in spite of SAIL investing Rs 2,000 crores for expansion.
In November 2016, SAIL informed Sebi that the government had in-principle decided disinvestment of three units including SSP. A PTI report said, " The Salem plant can produce austenitic, ferritic, martensitic and low-nickel stainless steel in the form of coils and sheets with an installed capacity of 70,000 tonnes per annum in cold rolling mill as well as 3.64 lakh tonnes a year in hot rolling mill."
The list of arguments that Edappadi Palaniswami made against the privatisation of the plant included - people have a deep sense of pride and attachment to the plant, the land the plant stood on was very valuable and that the plant provided employment to 2000 persons.
"In the case of the Salem Steel Plant, the Government of Tamil Nadu had acquired about 15.5 sq.km. of land in 9 villages more than four decades ago in the foot hills of Kanjamalai, Salem District. It was possible to undertake such extensive land acquisition mainly because of the Public Sector character of the plant. Today, any proposal to privatize the Salem Steel Plant would cause considerable unrest amongst the people, particularly amongst those whose lands were acquired. Land is perhaps the most valuable and sought after asset in the possession of Salem Steel Plant today," the CM says.
He further claimed, "The State Government has supported the expansion project costing Rs.2005 crores of the Salem Steel Plant with a structured package of incentives." The Chief Minister further declared that the news of privatisation has caused apprehension and dismay amongst the people of the state.
"It has always been our belief that the Public Sector Undertakings are capable of performing very well provided they are given the right support and direction in the dynamic economic scenario," wrote the Chief minister. " The causes for the Company‚Äôs recent losses must be studied and Salem Steel Plant must be given a chance to improve its efficiency and make a turn around," he notes. The State Government further told the Centre that this study would help transform the plant into a profit making company.
"I therefore request you to kindly intervene in the matter urgently and advise the Ministry of Steel and the Steel Authority of India Ltd to reconsider any proposal that they may have of privatizing the Salem Steel Plant," the Chief Minister concluded.