'Anti-national' decision to hand over profit making strategically important PSU to Japanese MNC

By Tapan Sen*

The Centre of Indian Trade Unions (CITU) has voiced robust support for the striking employees of Ferro Scrap Nigam Limited (FSNL), who have embarked on an indefinite strike starting September 28, 2024. This action stems from the workers' concerns over the NDA government's aggressive efforts to privatize FSNL, undermining the legal framework established in India.

CITU is urging the central government to immediately retract its supposedly anti-national decision to hand over this strategically important Mini Ratna Company to M/s. Konoike Transport Co. Ltd., a Japanese multinational corporation.

It is alarming that, while the Chief Labour Commissioner’s office is mediating with unions across FSNL's six plants—located in Durgapur, Burnpur, Vizag, Rourkela, Bokaro, and Bhilai—the central government is pressing ahead with plans to sell the company, in apparent violation of the Industrial Dispute Act of 1946 and other labor laws. Steel is a critical pillar of modern India, and the public steel sector, including companies like Steel Authority of India (SAIL) and Rashtriya Ispat Nigam Ltd (RINL), relies heavily on FSNL for scrap handling since its inception.

Shockingly, the government has not engaged with these stakeholders regarding such a crucial matter, and the senior management at FSNL remains largely uninformed about the ongoing privatization efforts. FSNL boasts a reserve fund of approximately Rs 200 crore and movable assets worth Rs 100 crore, providing employment for over 600 employees and around 5,000 contract workers.

In the fiscal year ending March 31, 2022, the company paid an interim dividend of Rs 9.50 per equity share. FSNL managed to dispatch 36.54 lakh metric tons of scrap and handle 107.13 lakh metric tons of slag haulage—a total of 143.67 lakh tons—marking a 12.88% improvement compared to the previous financial year. The company operated at an impressive 97.81% capacity during 2021-22, underscoring its operational excellence.

The decision to privatize such a profitable enterprise appears irrational and unfounded, fueled by an unwavering obsession with privatization. The JP Shukla Committee, established by the Steel Ministry, had previously recommended converting FSNL into a subsidiary of SAIL or forming a joint venture with SAIL, RINL, and Metal Scrap Trade Corporation (MSTC).

CITU has repeatedly urged the Central government to act on this recommendation, yet instead, the government is moving to sell a well-performing public entity to a foreign corporation at a significantly undervalued price, which would result in a lasting detriment to India's public sector and its populace.

CITU condemns the Modi government's authoritarian and anti-national stance and stands firmly with the striking FSNL workers. The organization calls on its units to actively promote awareness of this issue among all workers and to rally support for this anti-privatization struggle.

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*General Secretary, Centre of Indian Trade Unions

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