AP govt may bail out RINL with its mega housing scheme

Visakhapatnam In a bid to bail out RashtriyaIspat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, there are indications that Andhra Pradesh government may come forward to bail out the cash-starved company by using its products for the Jagananna YSR Housing Scheme.

Under the scheme, the government announced to construct 30 lakh houses across the State for the urban and rural poor under the aegis of Andhra Pradesh State Housing Corporation Ltd (APSHCL). The government said it will spend Rs15,810 crore during the current fiscal compared to Rs10,203 crore the previous year on the housing scheme, one of the important programmes listed in the Navaratnalu programme by the YSRCP. Houses are being built with 365 sq ft in one cent land at a cost of Rs4 lakh and 430 sqft area costing Rs4.30 lakh.

In response to representations submitted by Visakhapatnam MP MVV Satyanarayana and Steel Executives' Association (SEA), the organisation for welfare of 5,000 executives of RINL, the Commissionerate of Industries recently issued a memo asking the District Industries Officer posted at District Industries Centre in Visakhapatnam to furnish a detailed report on the request of the SEA and the MP in consultation with them and the management.

There is increasing demand from the workers here to purchase its steel and release advance to enable buying raw materials to revive the third blast furnace to increase its production at the earliest, RINL recognised union leader D Adinarayana told Bizz Buzz.

As RINL is battling hard for survival due to its inability to produce at its full rated capacity, it is facing a host of problems. "The company is incurring huge losses as it is unable to operate at 7.3 million tonnes per annum by making use of all the blast furnaces mainly due to severe working capital crunch. Hence, we hope the State Government, which needs huge quantities of steel for construction of YSR Jagananna Colonies can source a good part of its requirement from RINL," a senior executive of the company said.

The management is also in the process of finalising bids for EoI it had sought for contributing towards working capital from interested parties in exchange of steel produced by it. Another strategy is to sell its surplus lands in the city and on the outskirts as part of monetisation of land to pool up funds to meet its working capital requirement by sending individual requests to various public sectors.

It is said that to reduce its losses by maximising its product, the steel plant is in immediate need of working capital amounting to Rs4,000 crore to Rs5,000 crore. RINL had invested around Rs16,300 crore for raising its production capacity from 3 to 7.3 mtpa.

General Secretary of SEA KVD Prasad earlier informed the government that unfortunately, RINL couldn't achieve its rated capacity due to the financial crisis. "RINL has been deprived of captive iron ore and coal mines since inception unlike other major steel producers,because of expansion and lack of mine. It is pushed to a severe crisis as it is unable to produce 60 per cent of its rated capacity for a long time. As a result, RINL shelling down a heavy amount towards production cost. On the other hand, the Government of India announced 100 per cent disinvestment of RINL in January, 2021, and the process is on. No budgetary support from Centre in this background has become a big handicap for India's first shore-based integrated steel plant, which was set up after 'VisakhaUkkuAndhrulaHakku' agitation. Even then RINL registered around Rs 23,000-crore turnover in FY23. RINL management issued EOI for partnership from interested parties to overcome the working capital crisis on March 27 last.