The Comptroller and Auditor Normal of India has pulled up state-run PSU metal majors, SAIL and RINL, for varied operational inconsistencies and inefficiencies resulting in losses operating into crores of rupees.
As per studies tabled in Parliament on Tuesday, the CAG stated, SAIL didn’t take ample steps to improve and modernise its manufacturing capability for refractories used within the steel-making course of.
The corporate did not represent a refractory job power and assess annual necessities on the Durgapur Metal Plant, Alloy Steels Plant, and Indian Iron & Metal Firm Metal Plant. This led to the procurement of extra stock of ₹257.15 crore (March 31, 2020) whereas the stock of refractories lay blocked for 15 to twenty years.
“SAIL additionally did not develop vendor base and continued to obtain gadgets on a single tender foundation,” it stated.
As an example, the Rourkela Metal Plant procured tundish refractory, a foundry tools, on a single tender for ₹113.39 crore in FY14–20, whereas the Bokaro Metal Plant procured refractory for ₹90.28 crore from the identical provider from 2015–16 to 2019–20 on a proprietary foundation.
“Refractory administration system in SAIL requires enchancment in order that in-house amenities are optimally utilised and prices for procurement of refractories are diminished,” the report tabled talked about.
Hedging of loans
The audit famous that the choice to hedge the mortgage and curiosity “was not constant”. Non-hedging of loans of $400 million by way of international alternate fluctuation led to avoidable expenditure of ₹194 crore. T
The corporate didn’t hedge curiosity on consumers’ credit score (LIBOR) besides in a couple of instances throughout March 2017 to December 2017.
“The vital ratios depicting SAIL’s monetary place, like debt-equity ratio, curiosity protection ratio, and web debt to EBITDA (earnings earlier than curiosity, taxes, depreciation, and amortisation) ratio point out monetary instability and a worsening credit score profile,” the report talked about.
RINL pulled up
In accordance with one other report tabled by the CAG, RINL was pulled up for delaying repairs at its two blast furnaces and a failure to synchronise upstream and downstream manufacturing amenities prompted a lack of almost ₹6,700 crore.
The blast furnaces had been commissioned in March 1990 and March 1992, with repairs being scheduled for 14 to 16 years from commissioning. Nevertheless, in opposition to this, precise repairs had been accomplished almost 24 years after commissioning, resulting in deterioration within the well being of furnaces and restricted operations.
“This prompted a lack of manufacturing of 1.78 million tonnes of sizzling metallic from 2011-12 to 2015-16 with a consequential lack of earnings of ₹1,396.64 crore,” it stated.
There was a lack of manufacturing of 4.93 million tonnes of sizzling metallic with a consequential lack of earnings of ₹1,844.82 crore because the blast furnaces had been “not utilised to their rated capacities” due to a failure to synchronise and revamp different upstream and downstream amenities.
The lack of manufacturing of two.36 million tonnes of sizzling metallic with a consequential lack of earnings of ₹810.38 crore due to “compelled shutdown of blast furnace No. 2 due to non-integration of upstream and downstream crops,” was additionally famous.
RINL reportedly delayed initiation of tenders and award of contracts for upstream and downstream crops, leading to a mismatch between the manufacturing capacities of various models and an extra value of ₹789 crore (roughly) for coke procurement.
August 02, 2022