Rourkela: Steel Authority of India (SAIL) is withdrawing its investment from three steel plants owing to immense losses for which the process will begin by April, 2017. Rourkela Steel Plant is also a loss making unit now and may be privatised. However, the RSP authorities are trying their best to avoid withdrawal of SAIL by increasing rents of their properties let out to various groups.
By December 2016, the losses of RSP had risen to a whopping Rs 3,432 crores. With decline in price of imported coal, price of steel production in the market has also reduced. However, compared to private players, RSP steel is more expensive and hence not popular among buyers. This has led to losses of the plant and missed targets in annual turnover.
The administration of the steel plant has decided to increase the rent of 308 chip type quarters that it has let out to state and central government run schools, colleges, private schools, business houses, banks, NGOs and so on. The rent will be increased five times and a 33 month lease contract will be made with a license fee.
With SAIL to withdraw investment from Alloys Steel Plant, Salem Steel Plant and Biseswaray Iron and Steel Plant but it is doubtful if RSP can avoid being privatised.