The Hindu Business Line : Vizag Steel urged to extend support to local units

Visakhapatnam, Dec. 2 The Visakhapatnam Steel Plant, as the biggest industrial unit in Andhra Pradesh, should encourage ancillaries and downstream units in the State, and the Rashtriya Ispat Nigam Ltd’s (RINL) track record in this respect has been dismal so far, according to several associations of small-scale units here.

At a press meet here on Tuesday on the occasion of SSI Day, the associations said that there was not a single ancillary or downstream unit now attached to the Visakhapatnam Steel Plant, and the going had become very difficult for the local SSIs in view of the economic recession.

Mr V. Gopala Krishna Prasad, Chairman of Velagapudi Steels, said that it was unfortunate that since 1991, when the steel plant started commercial production, the same situation had been prevailing due to one reason or the other. “Velagapudi Steels was initially attached to the steel plant, as a downstream unit, but there was a plethora of problems and we had to seek the support of SAIL. We could rescue our unit only by signing a buyback pact with SAIL,” he said.

Banks’ help sought

He also urged the banks to lend support to the SSIs and urged them to lend liberally to such units, as the RBI had eased the CRR and SLR norms to inject liquidity into the financial system. He sought one-year moratorium on loans taken by SSIs.

Mr B.V. Rama Rao, President of the Federation of Andhra Pradesh Industries (FAPI), echoed the same demand for moratorium and urged the State Government to take back land from the Visakhapatnam Steel Plant and allot it to SSIs.

“A huge chunk of land, 22,000 acres, was given to the steel plant at the time of construction and, in fact, the plant does not need more than 12,000 acres even after expansion. There is not a single plot available in any of the 256 industrial estates in the State to be given to the SSIs. The bigger units are grabbing the land in the SEZs. Therefore, the State Government should take back at least 4,000 or 5,000 acres from the steel plant,” he pleaded.

He said the very existence of SSIs was in jeopardy due to the economic recession and the Congress Government, which had promised to revive 38,000 sick small units in the State four years ago, had not revived a single one. He urged the Government and banks to extend help on a priority basis.

Mr V.V. Krishna Rao, Director of Steel Exchange India Ltd, and Mr V.V.N. Murthy of Sajeela Enterprises, voiced similar complaints of gross neglect of the local industry by the steel plant and wanted the RINL to change its policies in view of the economic recession and extend a helping hand to local units.

Mr R. Jagapati Raju, President of the Industrial Estate Units’ Association, and Mr Trinadha Reddy of FAPI also spoke.

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