Irked by privatisation move, RINL puts up stellar performance

The workers have decided to avoid disruption in production so as to prove the Centre's decision wrong

Visakhapatnam: RASHTRIYA Ispat Nigam Limited has put up a spectacular show after the Cabinet Committee on Economic Affairs (CCEA) accorded in-principle approval to the proposal of NITI Aayog for 100 per cent privatisation of the navratna company on January 27.

RINL achieved a sales turnover of Rs 18,000 crore, the second highest in its history by registering a growth of 13 per cent during 2020-21. Incidentally, even before the formal decision was known, the workforce of RINL, the corporate entity of Visakhapatnam Steel Plant have been working hard to narrow down the losses to put 'Andhra's pride' back on the right track. RINL's financial liabilities increased to Rs 22,000 crore due to investment of Rs 16,300 crore on expanding capacity from 3 million tonne to 7.3 million tonne in two phases by borrowing loans at high interest.

Lack of captive mines forced it shell out more towards input cost-a fact admitted by Finance Minister Nirmala Sitharaman and Steel Minister Dharmendra Pradhan in Parliament. Long gestation period of 20 years in commissioning the plant is another reason for escalation of its project cost. The company, which clocked a turnover of Rs 17,000 crore with a net loss of Rs 3,910 crore during 2019-20, is expected to narrow down its losses during the just concluded financial year after auditing.

RINL registered a net profit of about Rs 740 crore in the last four months of the financial year. "We have narrowed down the net losses substantially by doing well in the last four months notwithstanding the fallout of the pandemic. If the tempo is sustained and captive mines are allotted we will start earning net profit in a few years," J Ayodhyaram, Visakha Ukku Parirakshana Porata Samiti chairman told Bizz Buzz on Friday.

Even as the unions served a notice on the management to go on indefinite strike anytime after March 25, they have decided to avoid disruption in production so as to prove the Centre's decision wrong. Chief Minister YS Jagan Mohan Reddy wrote two letters to Prime Minister Narendra Modi to explore alternatives like converting loans into equity, monetisation of land and allotment of captive iron ore mines to avoid privatisation.

"We are confident that with the allotment of captive mines, restructuring of loans and few other incentives, RINL could achieve a turnaround," former IPS officer VV Lakshminarayana, who filed a PIL in AP High Court, against the Centre's decision, said.

The demand for the plant, the first shore-based facility in the country, was conceded in 1971 after 'Visakha Ukku Andhrula Hakku' agitation claimed lives of 32 protesters. The plant, which was in the beginning part of SAIL had registered a turnover of Rs 243 crore during 1991-92 achieved the highest ever turnover of Rs 20,000 crore during 2018-19. Though then Prime Minister laid the stone in 1971, project work commenced in 1982. It was dedicated to the nation in 1992.

The plant was referred to BIFR in February 2000 due to erosion in its net worth but however due to structural adjustment done during the Vajpayee-led government, it turned into a debt-free company in September, 2003 and wiped out accumulated losses in January, 2006.