No privatisation of RINL for now: Union Minister
MoS for Steel Faggan Singh Kulaste says efforts being made to strengthen Vizag Steel Plant
VSP union leaders submitting a memorandum against privatization of Vizag Steel Plant, to MoS for Steel Faggan Singh Kulaste in Visakhapatnam on Thursday. VUPPC co-chairmen Ch Narsinga Rao, D Adinarayana and Mantri Rajasekhar stated in the memorandum that if operated at 7.3MT capacity, it can earn a profit of Rs12,000 crore
The statement comes at a time when Bharat Rashtra Samiti (BRS) expressed interest in bidding notification by RINL, while YSRCP turns against it
Visakhapatnam: Amid war of words between the Bharat Rashtra Samiti (BRS) and YSR Congress Party over the former’s bid to take part in the expression of interest (EoI) notification issued by Rashtriya Ispat Nigam Ltd (RINL), Union Minister of State (MoS) for Steel Faggan Singh Kulaste on Thursday sprang a surprise by announcing that the strategic disinvestment of the public-sector unit is not being pursued for the ‘time-being’ fuelling speculation that it has been put on hold.
The Union Minister during his visit to Visakhapatnam Port Authority (VPA) said they are working out modalities to strengthen RINL. He said they are also making efforts to sort out the raw material problem and described BRS’ claim to take part in bidding through Singareni Collieries Company Ltd (SCCL) for giving working capital and raw material supply in lieu of steel products promised by RINL as a 'political decision.'
Kulaste’s statement was preceded by the remarks made by Department of Investment and Public Asset Management (DIPAM) Secretary Tuhin Kanta Pandey at CII Global Economic Policy Summit that as “the in-principle approval is there. We are going forward in working out the transaction structure.”
“We welcome the development, which is a result of our struggle to save RINL for over two years. However, it lacks clarity. We will continue our fight till the Centre withdraws its decision for strategic disinvestment. We also promise that by giving working capital and granting captive mines, RINL can clock a turnover of Rs50,000 crore by operating all three blast furnaces and provide at least Rs9,000 crore per annum towards taxes,” Visakha Ukku Parirakshana Porata Committee (VUPPC) leader J Ayodharam told Bizz Buzz.
The plant was set up by the government by acquiring 22,000 acres with a capacity of 3.2 million tonnes with the infusion of Rs4,890 crore and another Rs4,000 crore towards bank loan.
It has fallen into a debt trap following capital expenditure incurred towards expanding capacity from 3.2 million tonnes to 7.3 million tonnes in phases with an investment of Rs16,300 crore. It immediately needs infusion of working capital to the tune of Rs5,000 crore.
The steel plant established after ‘Visakha Ukku Andhrula Hakku’ agitation after sacrifice of 32 lives in police firing and considered ‘Pride of Andhra’ has incurred losses aggregating Rs22,000 crore over a period of time. The Cabinet Committee on Economic Affairs (CCEA) in January, 2021 accorded in-principle clearance for 100 per cent strategic disinvestment of RINL, also popular as Vizag Steel, its subsidiaries and joint ventures by way of privatisation.
SCCL bid
The Telangana Government, which holds 51 per cent equity in SCCL, deputed three directors of the coal miner’s directors and a few other officials to VSP to hold talks with RINL officials and explore participation in the bid. The move angered YSRCP as it drew severe criticism from YSRCP general secretary Sajjala Ramakrishna Reddy and Industries Minister Gudivada Amarnath.
BJP State general secretary PVN Madhav said Telangana itself has borrowed indiscriminately and as to how it can give working capital and raw material to RINL. Meanwhile, BRS working president and Telangana Industries Minister KT Rama Rao said that the BJP-led NDA Government has slowed down on privatisation issue because of strong resolve by BRS to prevent handing over RINL to private parties.
BRS working president KT Rama Rao made a series of statements in the recent past that they will not allow privatisation of RINL and they will respond to EoI notification issued on March 27 for a partner to fund working capital and supply raw materials in exchange for finished products rolled out from the steel plant.
We welcome the development, which is a result of our struggle to save RINL for over two years. However, it lacks clarity. We will continue our fight till the Centre withdraws its decision for strategic disinvestment,” Visakha Ukku Parirakshana Porata Committee (VUPPC) leader J Ayodharam tells Bizz Buzz
