Chennai, Dec 16 (IANS): Tamil Nadu Chief Minister K.Palaniswami has urged Prime Minister Narendra Modi to advise Union Steel Ministry and the Steel Authority of India Ltd (SAIL) not to privatise the Salem Steel Plant, saying its land is the most valuable and sought after asset.

"The Government of Tamil Nadu had acquired about 15.5. square km of land in nine villages four decades ago in the foot hills of Kanjamalai, Salem District," he said, in a letter to Modi on Friday, the text of which was released to the media here on Saturday.

Stressing that Public sector undertakings are "capable of performing better provided they are given the right support and direction in a dynamic economic scenario", Palaniswami said.

"I believe that the reasons for the Salem Steel Plant's recent losses must be studied thoroughly and the Salem Steel Plant must be given a chance to improve its efficiency to make a turn-around. If that is done, I am sure that Salem Steel Plant will certainly transform once again into a profit making Public Sector Undertaking," he added.

Palaniswami pointed out the Tamil Nadu government had supported the Salem Steel Plant's expansion project with a structured package of incentives in the form of soft loan, capital subsidy, electricity tax exemption and environmental protection subsidy.