Comments
Controversy has flared up over the 10 per cent equity disinvestment and the initial public offering (IPO) of Rashtriya Ispat Nigam Ltd (Visakhapatnam Steel Plant) here scheduled to hit the market on October 16. The trade unions, other organisations and political parties are opposing the move.
The unions have served notice for a two-day strike on October 12 and 13 in protest against the disinvestment. Earlier, the employees went on a day's strike on July 24 over the issue. However, the management is going ahead with the roadshows for the IPO. Two teams, one headed by RINL Chairman and Managing Director A.P Chowdhary, have gone abroad to canvas in the US, the UK, Singapore and Hong Kong. After the overseas campaign, roadshows will be conducted in Mumbai and Chennai, according to management sources.
The unions have expressed the apprehension that the disinvestment process is only a prelude to privatising the steel plant and the plant, set up after the sacrifice of 32 lives in the agitation conducted in the late sixties, will go into private hands. The unions argue that there is no necessity for RINL to take up disinvestment a this juncture as it is doing well. RINL, they argue, has spent more than Rs 10,000 crore so far out of its internal accruals to finance the expansion project to hike the capacity from 3 million tonnes to 6.3 million tonnes and further it can raise debt in the market to fund its future expansion projects. The steel plant does not urgently need the Rs 2,500 crore being raised through the IPO.
Raw material security: According to the unions, if the Government were really interested in the future of the plant, it should secure captive iron ore mines for it. The NMDC currently provides iron ore for the plant and the production cost is on the higher side, roughly estimated at Rs 1,000 or more per tonne, blunting its competitive edge. The Centre and the Union Steel Ministry are not seriously addressing the issue and are instead concentrating on the needless IPO and disinvestment.
The management has offered 10 per cent of the IPO to the employees but the move has not pacified the unions.
Comments
COMMENT NOW
Comments
Comments have to be in English, and in full sentences. They cannot be abusive or personal. Please abide by our community guidelines for posting your comments.
We have migrated to a new commenting platform. If you are already a registered user of TheHindu Businessline and logged in, you may continue to engage with our articles. If you do not have an account please register and login to post comments. Users can access their older comments by logging into their accounts on Vuukle.