RINL puts up a good spectacular show again
Visakhapatnam Hours after an unanimous resolution adopted in Andhra Pradesh Assembly appealing the Centre to rollback its decision to hand over Rashtriya Ispat Nigam Limited to private investors, there is hectic speculation on whether it will make any impact.
The resolution promised in February to the union leaders here by Chief Minister Y.S. Jagan Mohan Reddy was adopted on Thursday with a fervent appeal to NDA Government not sale the Visakhapatnam Steel Plant and other assets belonging to RINL.
Describing RINL, the corporate entity of VSP, popular under its brand name Vizag Steel, the State urged Centre to drop disinvestment decision.
After an agitation in undivided AP under the banner of 'Visakha Ukku, Andhrula Hakku' which claimed lives of 32 persons in police firings at multiple locations, then Prime Minister Indira Gandhi in 1970 conceded the demand for India's first shore-based integrated steel plant.
The Cabinet Committee on Economic Affairs (CCEA) took in-principle decision on January 27 for 100% strategic disinvestment of Government of India's shareholding in RINL, along with management control by way of privatisation.
"The Chief Minister has written two letters to Modi which remained unanswered till date. We have to see how the resolution will make an impact in stopping strategic sale. Lands were acquired from farmers by the State authorities and for transferring to others post-privatisation the State Government permission is a must," J. Ayodhyaram told Bizz Buzz on Friday.
Visakha Steel Employees' Congress general secretary and INTUC leader Mantri Rajasekhar said the Chief Minister was firm in stopping privatisation of RINL, the pride of Telugus all over the world.
YSRCP MP MVV Satyanarayana hailed the resolution adopted in the Assembly.
TDP leader Palla Srinivasa Rao said several such resolutions have been ignored by the Centre in the past. If CM is firm let him serve an ultimatum to NDA, he said.
Considering the sensitivity of the issue and widespread agitation by the trade unions and common public against the said proposal, the Government of AP has acknowledged the need for supporting the cause of protecting RINL from disinvestment. Accordingly, the Chief Minister of AP, hasaddressed a detailed letter dated 06.02.2021 to the Prime Minister of India with a request to reconsider the proposal of disinvestment and also suggested alternative solutions that may be helpful to address the issue of huge losses incurred by RINL.
The CM has also reiterated the stand of the AP Government during his interaction with the trade unions at Visakhapatnam on February 17, according to the resolution.
After continuous struggle for funds from GoI, the plant was commissioned and started production in 1989-90. Around 16,000 were employed as permanent and around 15,000 were employed as contact workers in phase 1 of 3 million tonnes, thus creating huge employment for the people of AP. The resolution pointed out that another 70,000 people were employed indirectly in various ancillary units.
According to a report of Ministry of Steel, RINL has excellent layout, infrastructure including land and large skilled workforce making it suitable to expand capacity up to 20 million tonnes of liquid steel per annum, the resolution stated.
The company incurred losses of Rs.4,982 crore up to 2001-02. Capital Restructuring was done by GOI in 1993 and 1998 converting GoI loans of Rs.1,384 crore as equity and Rs.2,937 crore as Preference Share Capital.
RINL exceeded rated capacity in 2001-02 and achieved turnaround in 2002-03. Peak capacity utilisation of 120% was achieved in 2005- 06 and peak Profit After Tax of Rs.2,008 crore was achieved in 2004- 05. It earned continuous profits for 13 years up to 2014-15 aggregating to Rs.12,958 crore.
It got sanction for for expansion to 6.3 Mtpa in October 2005 and completed the same in 2014-15 with investment of Rs.12,291 crore.
The AP Governance said as the 3 Mtpa facilities were completed after more than 2 decades of operation, their modernisation became technological necessity.
As modernisation of Blast Furnaces-1 & 2 increased their capacity by 1 Mtpa, enhancement of liquid steel capacity, from 6.3 Mtpa to 7.3 Mtpa was also planned by investing Rs.4,000 crore.
The resolution suggested immediate grant of captive iron ore mines to reduce production cost drastically, capital restructuring and reducing loan burden by doling out some sops and monetisation of part of its unused lands to put back RINL track.
