The central government led by BJP and its allies seem to have decided to offer a permanent solution to the long standing woes of Vishakapatnam Steel Plant ( Rashtriya Ispat Nigam Limited), which is on the brink of closure following the suspension of several operations in the last couple of years due to the shortage of coal and other raw materials.
As BJP is partnered with both the Telugu Desam Party and Janasena, key players of the coalition government at the centre, in Andhra Pradesh, the plans to privatize the Vizag Steel Plant were put on the backburner due to the pressure from both Chandrababu Naidu and Pawan Kalyan. Now, there efforts to merge the steel plant into Steel Authority of India Limited to revive the operations.
The government is considering merger of RINL with another state-owned steel company SAIL as one of the options to ensure survival of RINL’s plant and resolve the financial and operational issues being faced by the Andhra Pradesh-based steel maker, sources said. To provide capital for continuity of operations at the RINL’s steel plant, plans like sale of land parcel to NMDC and bank loans are also being worked out.
As SAIL also comes under Steel Authority of India Limited, merging RINL into it would help continue the operations with the supply of raw materials and also to settle the financial issues of the plant. Sources further said that arranging capital for operations are also being considered, besides other measures like having talks with lenders for financial assistance and monetising assets through sale of a land parcel of 1,500-2,000 acre to NMDC for a pellet plant.
Vizag Steel Plant has three blast furnaces but only one is operational at present. Last week, there were reports that the centre has decided to lend a financial assistance of 2500 Crores through SBI. However, the news later turned out be a rumour with no such announcement through official sources.
In January 2021, the Cabinet Committee on Economic Affairs (CCEA) gave its ‘in-principle’ approval for 100 per cent disinvestment of government stake in RINL, also called Visakhapatnam Steel Plant or Vizag Steel, along with RINL’s stake in its subsidiaries/joint ventures through strategic disinvestment by way of privatisation.
There have been widespread outrage among the employees unions and several protests are being made since then. The ruling government in Andhra Pradesh assured that it will ensure the centre won’t privatize the plant at any cost. A couple of months ago, Union Minister for Steel HD Kumaraswamy also visited the plant and assured the same.
