Despite Rs 11,440-cr revival plan, uncertainty looms large over future of RINL workforce

Visakhapatnam: Even though the New Year of 2025 began with the sensational announcement of Cabinet Committee on Economic Affairs on January 27 to nullify its decision to privatise Rashtriya Ispat Nigam Limited (RINL) and launch a Rs11,440-crore package to put it back on the right track, fears over its disinvestment continued throughout the year.

The decision to hand over the maintenance of critical wings of steelmaking like Steel Melt Shop and other mills and give wages to permanent workforce based on their performance kept the employees on the tenterhooks. Now after two rounds of VRS and the present round which has been notified for the employees to give an option to retire (for those due for superannuation after January 1, 2027) and drastically pruning of the number of contract workers have led to strengthening of apprehensions over privatisation in future.

A circular issued on November 15, which generated a lot of heat, said the management has decided to disburse salary proportionate to the achieved capacity utilisation targets. The circular specified targets and said due to non-fulfilment of targets, salary from November onwards shall be disbursed proportionate to the targets achieved.

RINL, the corporate entity of India's first shore based integrated steel plant named Visakhapatnam Steel Plant, has a rich land bank of nearly 20,000 acres in the backyard of Gangavaram Port, The port was built in the face off stiff opposition under PPP model and later acquired by the Adani Ports and Special Economic Zone (APSEZ) after acquiring land from RINL and the State Government.

The steel plant, which had heavy cost escalation due to delayed start, began with an installed capacity of three million tonnes. In various phases, it was expanded to 7.3 million tonnes with a total investment of Rs16,300 crore. Raw material insecurity is one of the major handicaps for RINL, entailing it a heavy burden on steel production unlike other major producers like SAIL, JSW Steel and Tata Steel.

Even after the Centre unveiled the revival plan, the rival trade unions of RINL cutting across party affiliations, have been demanding the merger of RINL with SAIL to make it a giant PSU steel entity. The capital infusion includes Rs10,300 crore as equity capital and conversion of Rs1,140 crore working capital loan as 7 per cent non-cumulative preference share capital redeemable after 10 years to keep RINL as a going concern. As on March 31, 2024, the net worth of RINL was minus Rs4,538 crore, current assets estimated at Rs7,686.24 crore and current liabilities were Rs26,114.92 crore. It had lost all the borrowing limits from banks for working capital and was not in a position to get further loans. The company had also defaulted on the Capex loan repayments and interest payments in June, 2024.

After announcing the revival package, the Centre said "the revival and continued operation of VSP at its full capacity will ensure efficient utilisation of public resources and help in achieving the objectives of National Steel Policy-2017.

Despite stout denial by Union Minister for Steel HD Kumaraswamy, Minister of State Bhupathiraju Srinivasa Varma, Andhra Pradesh Chief Minister N. Chandrababu Naidu and TDP State president Palla Srinivasa Rao, an MLA from Gajuwaka, the uncertainty over RINL's future still continues.

One thing in 2025, which undoubtedly remains the positive sides of the revival effort, was the narrowing down of loan burden and operation of all the three blast furnaces from the brink of closure.