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SAIL to offer fresh VRS next year

Mahua Venkatesh in New Delhi

Steel Authority of India Ltd will launch a fresh voluntary retirement scheme targeted at 2,500 employees in January 2003. The scheme will be operational during January-March.

SAIL had got a sanction of Rs 500 crore (Rs 5 billion) for the VRS for the current fiscal. However, it is learnt that a substantial amount is still left with the company.

Government sources said the new package will be made more attractive for employees. "The new package will be made lucrative and some of the terms and conditions will be redefined for the employees. We hope that we meet the target. The finer points of the scheme is yet to be decided," a source said.

The last scheme that ended on August 31 failed to meet its target. Only 4,000 employees opted for the scheme, while SAIL's target was 6,000 employees.

The source said the last scheme failed to gather momentum following the reduction of various allowances, including leave, owing to government regulations. SAIL has about 141,000 employees.

The company has managed to retrench about 40,000 in the last five years and will continue to focus on cutting down its workforce over the next couple of years.

Also to improve its financials, SAIL has budgeted Rs 520 crore (Rs 5.2 billion) as cost savings for 2002-03. This budget is in line with the recommendations of the expert group to save costs on various production areas.

At the same time, the company is seriously trying to streamline its businesses and units.

Jindal Strips Ltd is likely to place its bids for the ailing Salem Steel Plant. However V S Jain, chairman SAIL, said the company will go ahead with the divestment only if it is financially viable.

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