Three Trade Unions viz HSEU(CITU), HSWU(INTUC) and DSSU(AITUC), who together represent 95% of the workers and employees of Durgapur Steel Plant and DSP Officers Association, the only representative organisation of the Executives of the same plant, strongly condemn this retrograde deal and have decided to resist this move tooth and nail.

The organisations feel that this decision will have far reaching disastrous effects on ASP's and DSP's overall economic, on SAIL overall financial performances and on the industrial climate of Eastern region of India as a whole, due to following reasons:-

* Present generation cost of DSP's Captive Power Plant is only Rs. 0.90/unit, whereas DSP purchases power from DVC at the rate Rs. 2.40/unit, i.e. Rs. 1.50/unit more than DSP's generation cost, DSP's CPP produces on an average, 740 million units per year. Even if ENRON agrees to accept DVC's rate. DSP will have to shell out an additional amount of Rs. 110 crore per year on power bill. If we go by the ENRON's bench mark rate of Rs. 3.50/unit and also the additional power cess that will become incumbent upon DSP to pay, it will have to bear an additional burden of Rs. 220 crores per year on account of electricity bill. This Rs. 220 crores will be straight away added to SAIL's and DSP's mounting annual loss.

* By handing over 49% or 51% share(and thereby handing over effective control on generation and distribution) to ENRON, DSP can hope to accrue Rs. 75/80 crore at best as one time payment. If we calculate 18% interest on Rs. 80 crore it will be able to save, at best, Rs. 14 crores annually. Thus for an annual gain of Rs. 14 crore, DSP will be saddled with an additional burden of Rs. 220 crores per year.

* Presently, the installation cost of any power plant is estimated at the rate of Rs.4 crores/MW. By this yard-stick, the cost of a 550 MW power plant should work out to be Rs. 2200 crore. Against this, ENRON is said to be paying only Rs. 350 crore for entire deal. When we consider that the plant load factor (PLF) of DSP's CPP is 97.34%, ENRON's payments should be considered as mere pea-nuts.

* This deal is not going to improve SAIL's financial image. By garnering a mere of Rs. 350 crores. SAIL will be nowhere near about in off-setting its annual interest burden of Rs. 2300 crore. On this contrary, its annual production cost will increase enormously.

* This decision will deliver a fatal body blow to ASP's financial viability. Being dependent on electric are furnaces for its steel production, power accounts for its seconds highest input cost. As this cost now threatens to go up threefold, ASP's last hope to survival will vanish. With little prospect of a market for its high unit value stainless steel in eight, it will plainly become a bad commerce to produce plain carbon steel with such a high power tariff.

* Both DSP and ASP suffered disastrously due to the vagaries of power supply during pre CPP era. Much of DSP's and ASP's accumulated loss can be traced back to uncertainties of power supply over a very long period of time (please see the annexure). Only after installation of CPP that production loss could be minimised. But now once again, SAIL is trying, on its own volition, to impose upon itself that very uncertainly of the past. SAIL is volunteering to become a prisoner in the hand of an outside agency. Whose axe SAIL is trying to grind, we all wonder.

* SAIL's CPP together employ about 1000 strong work force. With this many manpower, he generation cost is enviably low, i.e. Rs. 0.90/unit. Even then ENRON proposes to reduce the manpower to the level of 350 only. That means that either SAIL will have to absorb the additional burden of this additional work force of 650 of these hapless workers will have to be shown the door.

* According to the news paper reports, ENRON shall augment generation capacity from 550 MW to 1000 MW through some investment. By this move, they hope to jockey themselves to the position of an important player in eastern region's power sector. If their hope bears fruit, they will surely enhance power tariff, and thereby jeopardize the industrial climate of entire eastern region of India.

* SAIL's facile plea that, for a cash strapped organisation like it, the only way left to mobilise additional resource for revamping steel plants is to enter into joint venture in power sector, is nothing but a hoax. If SAIL is unable to mobilise resource for steel production, how it is going to bear the burden of increased power tariff?

*In production and Productivity meeting at New Delhi, Chairman, SAIL, categorically assured a transparent dissemination of information's regarding all joint ventures or those involving sale of SAIL's assets. But when the chips are down, SAIL Board is found tobe playing its cards very very close to its breast. Even CITU's. one of the forum unions letter to Chairman, dated 11 December'98, posing specific questions about this deal, has been chosen to be ignored.