Andhra Pradesh govt. does a U-turn on Vizag Steel Plant privatisation

Visakhapatnam: The alliance government of Andhra Pradesh might make a U-turn on privatisation of the Rashtriya Ispat Nigam Ltd, the corporate entity of Visakhapatnam Steel Plant.

The statements given by TD state president Palla Srinivasa Rao and Union minister of state for heavy industries Srinivas Varma indicate that the privatisation is inevitable. A week ago, Srinivasa Rao told Deccan Chronicle that the steel plant would remain in public sector and the state government was seeking a revival fund of  Rs 8,000 crore and transfer of 22,000 acres of land from the President to RINL. In contrast, the heavy industries minister brushed aside such talk and asserted on Monday that privatisation of the steel plant was part of the NDA government’s disinvestment policy.

In a meeting he addressed in West Godavari, the minister said VSP incurred huge losses this year also and the Central government would not allow waste of public money. RINL incurred a loss of Rs 2,859 crore the previous financial year and its capacity was running much below the 7 MT capacity.

When a company is making massive losses year after year, the government would go for privatisation, he stressed.

The Telugu Desam has been suggesting a merger of RINL with SAIL so that the company would remain in the public sector and can easily make profit.

After the elections, Srinivasa Rao changed the stand taken by the state government and announced that the government would seek a revival package.

Statements from Srinivasa Rao and minister Srinivas Varma upset trade union leaders agitating against privatisation for the last three and half years.

Steel plant union leader Varasala Srinivasa Rao said the NDA government’s policies pushed the RINL into losses. RINL did a turnover of 28,000 crore in 2021 and earned profits. But, after the privatisation move, there were hurdles for RINL in getting raw material, which led to a fall in the production, he said. Steel executives association general secretary K.V.D. Prasad said merger with SAIL would be a good decision as it would save the plant and benefit the workers and the displaced persons.

He said SAIL, having captive mines, could capture the southern markets by taking over RINL and make an expansion to produce 30 million tonnes of steel. Currently SAIL is producing 20 million tonnes.

“Only the state government can answer why it is pushing for a revival package instead of merger with SAIL,’’ Prasad told DC.

Sources in Delhi said N. Chandrababu Naidu would give the much-needed comfort to the Union government to proceed with the privatisation plan, a decision on which is pending for three and half years due to objections raised by the previous YSRC government.

Currently, the RINL plant has a 7 million tonne capacity, which can be expanded up to 17 MT if fresh investment is pumped in.

The Centre meanwhile drew up a fresh plan for RINL privatisation, under which the prospective buyers would have to give a commitment to expand its 7 MT plant capacity, the sources said.

Meanwhile, Union heavy industries and steel minister H.D. Kumaraswamy would arrive in Visakhapatnam on Wednesday evening by a special flight. After an overnight stay at the VSP guesthouse, the minister would visit the steel plant on Thursday morning and discuss matters with the top executives. He would fly to Hyderabad at 1.30 pm the same day, an official release said on Tuesday.