New Delhi: State-run steel giant SAIL management will be overhauled with its chairman S K Roongta likely to be designated as its chief executive officer, while the number of directors on its board will be pruned to 17.
“We realize that SAIL needs to take quick decisions in view of its ongoing expansion and modernization programme worth Rs54,000 crore to reach a capacity of 26 million tonnes by 2010. We believe that its management of the steel giant needs to be more vibrant and that is why there is a proposal to prune the number of directors on its board from 24 to 17,” a senior Steel Ministry official told PTI.
The Ministry has forwarded the proposal to the government and it is understood the Appointments Committee of the Cabinet is currently considering the matter.
Of the 24 existing directors, 10 are independent directors as two posts are still lying vacant.
The official said the Ministry is keen to ensure SAIL completes its expansion plans on time, given that the demand-supply mismatch is hovering around 7%.
With no fresh capacities coming up and steel demand in the country soaring, prices of the alloy have risen by about Rs7,000 during the past five months, triggering concerns that steel prices were contributing substantially to inflation, he said.
“A smaller Board will be able to take faster decisions and enable the PSU meet its needs on time. Under the proposed dispensation SAIL chairman Sushil Kumar Roongta will be designated as the CEO of the company with adequate powers to steer it,” the official said.
If the Steel Ministry has its way, Roongta will be made more accountable as he be direct responsible for the plants.
“Currently, all SAIL units have their respective managing directors and ensuring accountability is a long-drawn process. We want the CEO to be adequately empowered and made accountable,” he reasoned.
However, it was not immediately known why the Ministry favoured pruning the number of directors and how it would make the PSU’s functioning more “vibrant”.
SAIL, which entered its golden jubilee year of production in February, has ended the year 2007-08 making a record 13.04 million tonnes of saleable steel.
Production of hot metal and crude steel was also highest ever at 15.2 million tonnes and 14 million tonnes, respectively.
About 465,000 tonnes of additional saleable steel were produced during the year by utilizing 118 per cent of rated capacity. It also achieved highest ever sales during 2007-08 at 12.4 million tonnes. The financial results of SAIL for 2007-08 will be announced in May.
The PSU achieved a record third-quarter net profit of Rs 1935 crore between October-December 2007. This was 32% higher than the net profit of Rs1,471 crore achieved during the corresponding period last year.
SAIL’s profit before tax (PBT) stood at Rs2,922 crore which was also the highest achieved in any third quarter, rising 31% over Rs2,234 crore last year.