The Hindu Business Line : Parliamentary panel seeks revamp of SAIL corporate plan

THE Parliamentary Standing Committee on Steel and Coal has lambasted Steel Authority of India Ltd's (SAIL) Corporate Plan 2012, which envisages increasing the public sector steel manufacturer's steel making capacity from the present 12 mt to 20 mt by 2012.

After a study of the plan and presentations made by SAIL officials, the Parliamentary panel is of the opinion that the corporate plan is full of lofty talks and is unlikely to yield any positive result for the company.

In its latest report, tabled in Parliament on Tuesday, the parliamentarians had stated: "The financial-cum-business restructuring package of SAIL and Corporate Plan 2012, is replete with rhetoric and devoid of concrete programme of action, are too myopic and short-term to yield positive results."

Though the company has shown exceptional profits during the last two financial years when it had wiped out its accumulated losses, the committee feels that it is not SAIL's credit but external factors like a booming market condition that has resulted in such high profitability. "Higher prices and not higher production primarily changed the fortunes of SAIL," the report said.

The committee also expressed its concern over the expected decline in SAIL's profit in the next financial year. "The profits (of SAIL) are going to fall by nearly 50 per cent from a high of Rs 5,739 crore in 2004-05 to Rs 2,082 crore in 2005-06 due to increase in cost of critical inputs. The committee feels that the increasing cost of inputs coupled with cyclic nature of steel industry would put tremendous pressure on SAIL to improve its physical performance," the report stated and added that the "corporate plan should be thoroughly revamped to suit the requirements of long-term scenario."

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