JUNE 15: Steel Authority of India's (SAIL) turnaround package through divestment of non-core activities has got a severe jolt with National Thermal Power Corporation (NTPC) assessing the former's captive power plants as unviable and not bereft of labour problems.An internal committee of NTPC dubbed the 302 MW plant at Bokaro as obsolete and unviable while it was not allowed to visit the other two plants, put on sale by SAIL, at Durgapur and Rourkela due to Unions' resistance, NTPC sources said.NTPC Board is yet to take a final decision on SAIL's offer to majority stake in its captive power plants totalling 542 mw through joint ventures. The high-powered committee of senior officials said that20-year old Bokaro Plant would cost about Rs 1,100 crore for renovation and modernisation while recommending that "techno-economically it is not a feasible plant to buy and operate without a problem."The government had approved over Rs 8,400 crore bailout package for loss-making SAIL which stipulated Financial and business restructuring in a time bound manner to enable the steel giant turn the corner in three years.Subsequently SAIL had identified seven areas for divestment with the objective of garnering up to Rs 8,000 crore over the next four years. SAIL is believed to have made offer to NTPC even after receiving bids from private power giants Enron of US and BSES in Mumbai on the grounds that employees would resist transfer of management control in the hands of private players.The committee comprising officials from the technical and finance and operation divisions had recommended that dependence of power plant on the steel plant was very high.The power plant has to rely upon the steel plant for common services like steam, raw water, gas condensators and locomotives, the sources said, adding therefore, operating power plant as a separate entity was not possible. Transfer of the power plant was also not feasible due to huge industrial relations (IR) problems.The joint venture company would have to absorb about 1,000 workers in case NTPC decides to take over the plant, sources said. SAIL had offered that the joint venture company would operate the plants for a period of 15 years.SAIL, which had reported a loss of over Rs 1,700 crore during last financial year, was banking upon sale of captive power plants in a big way to raise financial resources to retire the debts.
