The Hindu Business Line : Equity dilution move in Vizag Steel flayed

Visakhapatnam, Dec. 24 The move to dilute the equity of the Visakhapatnam steel plant by 25 per cent came in for widespread criticism at a roundtable conference at the Visakhapatnam Journalists’ Forum here on Monday.

Mr M.V.S. Sarma, member of the Legislative Council (CPI-M), said it was regrettable that the Union Government and the board had decided to sell off 25 per cent of the shares when the plant has finally turned around and has been earning profits for the few years.

“When the plant was in dire straits in the late nineties, the Union Government was very reluctant to go to its rescue. Now that the VSP is doing well and is in a position to expand the capacity on its own, the Government is doing everything possible to weaken the plant. It is nothing but a blatant attempt to destroy a PSU steel unit,” he said.

Protecting the plant

Mr Sarma said the people of the State had agitated for the steel plant and got it finally after making great sacrifices. The time has come for an agitation to protect the plant, he said and added that his party would take up the cause.

Mr Sarma also found fault with the State Government for allotting Obulapuram iron ore mines to the newly-floated Brahamani Steels in Kadapa district while ignoring the claims of the VSP. “Neither the Union Government nor the State Government is bothered about the VSP’s just claim for captive mines, while all sorts of concessions are being doled out to Brahmani Steels,” he alleged and warned the Government that any attempt to privatise the plant would be opposed.

Presiding over the roundtable conference, Prof K.V. Ramana, Chairman of People for India, Visakhapatnam forum, said that 29,000 acres of land was acquired for the Vizag steel plant, displacing 50,000 families.

When the need for such a huge chunk of land was questioned at the time, the Government had justified it by saying that the land was required for future expansion. Therefore, he argued, the cost of expansion could be met by selling off the surplus land rather than inviting private equity.

More Stories on : Disinvestment | Steel | Andhra Pradesh

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