"It is actively under our consideration and we will soon come out with a proposal," Sinha told PTI when asked if he was proposing to move cabinet shortly for the restructuring of SAIL.

Asked whether he would allow writing off the SAIL's Rs 5000 crore loan from steel development fund or converting it into equity to provide the steel monolith a greater credit leverage, Sinha said the government was looking at all the options but declined to give any details.

"We are still working out the details," Sinha said while refuting that finance ministry was delaying the bail-out packages for SAIL and private sector Essar Steel.

"Finance ministry is not dealing with the case of Essar Steel. Financial institutions are dealing with the case," he said, but added that steel sector on the whole was looking up going by the performanceindicators of the first two months of the current fiscal.

Essar Steel has asked financial institutions to bail out its $ 250 million floating rate note (FRN) which is due for redemption on July 13. Finance Ministry, which is reportedly in favour of bailing out Essar Steel to prevent it from becoming the first Indian corporate to default at international markets, has agreed with financial institutions' conditionalities that Essar would have to hive off its oil, power and mineral businesses.

Official sources indicated that a proposal envisaging conversion of about Rs 5,000 crore SDF loan into equity along with measures to support SAIL for its voluntary retirement scheme (VRS) and financial restructuring would be sent for cabinet's approval in the next one or two weeks.

SAIL, which incurred a loss of Rs 1574 crore during 1998-99 despite a seven per cent sales growth, had approached the government seeking writing off of its Rs 5,000 crore loan from its overall loan of Rs 6,069 crore.

The corporation hadalso sought government guarantee to mop up from the market Rs 1,500 crore each for voluntary retirement scheme (VRS) and annual expenses for current fiscal as part of its financial restructuring.

SAIL chairman Arvind Pande had exuded confidence that corporation could turnaround and post profits from the current fiscal itself if government approved its revenue neutral package at the earliest besides improvement in market conditions.

Officials sources, however, said that clearance of the restructuring plan could enable the steel monolith to break even next year and record profits thereafter.

SAIL to cut down manpower

CALCUTTA: Steel Authority of India Ltd has kicked off a brain-storming exercise at various levels to prepare an action plan for reduction of surplus manpower at its corporate headquarters in Delhi and at its plants, according to insiders of the government-owned steel major.

The company spokesman admitted that talks are on at various levels based on the suggestions made by the USconsultancy firm McKinsey & Co. He, however, declined to divulge further details.

McKinsey has suggested that SAIL should reduce its manpower from the existing 1,70,000 to 1,00,000 in a span of five years. However, the organisation seems to be largely unprepared for the same, it is believed.

"Proper understanding of the reduction process is still lacking. In an organisation like SAIL, this should have been opened out to the trade unions, if not to the media," a senior SAIL official said. The major advantage in favour of SAIL is that around 45,000 persons are normally scheduled to retire over the next five years.