AP to Centre: Revive RINL’s Vizag Steel, do not divest

V Rishi Kumar Hyderabad | Updated on February 18, 2021

Vizag Steel Plant employees and trade union members stage a protest against the privatisation , in Visakhapatnam (file photo)   -  PTI

Potential to monetise about 7,000 acres of landbank for funds

The proposed move by the Centre to privatise Rashtriya Ispat Nigam Limited (Vizag Steel Plant) has the Andhra Pradesh government worried as it is keen that the unit be revived rather than divested.

Chief Minister YS Jagan Mohan Reddy has written to Prime Minister Narendra Modi seeking his support for a revival plan rather than divestment of the loss making steel unit.

This assumes importance in the backdrop of the State itself trying to set up a steel plant at Kadapa and is engaged in talks with some of the leading steel makers including Korean major Posco, which has evinced interest.

The opposition TDP and the unit workers have also voiced concern. Various trade unions are also opposed to the diverstment plan and want the unit revived.

During the hour-long meeting with Trade Union leaders on Wednesday, the Chief Minister assured them that the State will bring pressure on Centre to stall privatisation of RINL and pass a resolution in the ensuing Assembly session.

He also stated that POSCO did not meet him on VSP issue but have evinced interest in other projects.

Jagan said the State government is awaiting the Centre’s response and asked the unions to maintain the production level. The capacity of the plant was hiked to 6.3 million tonnes.

One of the problems for the unit is that it does not have captive iron ore resulting in the production cost going up by an additional ₹4,000 per tonne.

The Centre has been requested to allot one iron ore mine from neighbouring Odisha on lease. RINL already has five mines in Odisha in the name of EIL holding 51 per cent stake.

The VSP has total debt of about ₹22,000 crore and of this ₹12,000 crore are long-term loans and the balance ₹10–12 crore were raised towards working capital and converted into long term debts. The Centre has been requested to convert the bank loans into equity.

The plant has 20,000 acres of land. Of this, 7,000 acres are not in use and this land can be monetised to raise funds. One of the suggestions being made is to consider merger of RINL with SAIL or profit making iron ore major NMDC.

Published on February 18, 2021

Follow us on Telegram, Facebook, Twitter, Instagram, YouTube and Linkedin. You can also download our Android App or IOS App.

This article is closed for comments.
Please Email the Editor

You May Also Like