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According to unconfirmed media reports, the union cabinet may decide on whether to allow Steel Authority of India (SAIL) and Rashtriya Ispat Nigam (RINL) to charter hire vessels to import raw materials.
Every year, the two firms together import around 14-15 million tonne of raw materials. As SAIL is expanding capacity to 23.46 million tonne per annum and RINL doubling it to 6.3 million tonne, there cumulative imports would likely to go up to over 60 million tonne by 2020.
In order to improve operational efficiency and save cost, these two state-run firms have been seeking freedom to charter hire vessels on their own.
Such a move would enable these firms reduce transportation costs, particularly when their import bill is set to rise manifold following on-going capacity expansions.
Presently, these steel firms are importing their raw material through ships chartered by Transchart, a state-owned enterprise operated by Shipping Corp of India (SCI).
It may be noted that state-run oil firms are given such freedom to charter hire vessels for ferry crude oil. As per current practice all Central Public Sector Units (CPSUs), barring those already given the dispensation such as ONGC and IOC, need to import cargoes with centralised shipping arrangements to be made through Transchart.