All eyes on outcome of HDK’s review meet on RINL

Visakhapatnam: Union Steel Minister HD Kumaraswamy will be holding a crucial review meeting with the top officials of Rashtriya Ispat Nigam Limited (RINL) here on Thursday amid demand by the workers union and officers’ association to merge it with SAIL.

His visit coincides with a circular issued by the management appealing employees to offer full or part of their basic, DA, other allowances and perquisites.

The merger with SAIL is being demanded from rooftops by the employees as a long-term solution. The cash-starved RINL, the corporate entity of Visakhapatnam Steel Plant is struggling for existence for past several years due to high production cost, increasing debt burden, working capital crunch and raw material insecurity.

The proposal for merger with NMDC, which supplies lion’s share of iron ore required by VSP, was shot down earlier by the Union Government. The 13,000-strong workforce is now in a confused state with conflicting reports under circulation on their future since the January, 2021 ‘in-principle’ decision of Cabinet Committee on Economic Affairs to privatise RINL.

Kumarswamy, who held a preliminary meeting with the senior officials on RINL in Delhi immediately after taking charge as Union Steel Minister, is expected to make some indications on government’s mindset after installation of Modi 3.0.

RINL has a rich land bank of about 20,000 acres but ownership is still not transferred from the President of India to the company.

A proposal mooted when Jyotiraditya Scindia was the Steel Minister is under consideration of the Centre. It envisages a Rs8,000-crore revival package including preferential equity shares to the tune of Rs3,200 crore, grant of Rs1,200 crore to reduce staff by rolling out Voluntary Retirement Scheme and payment of around Rs1,500 crore by NMDC for leasing out 1,150 acres for setting up of a pelletisation plant near VSP.

Employees are agitated since the privatisation decision as VSP is considered the ‘Pride of Andhra Pradesh. India’s first shore-based steel plant was established after the ‘Visakha Ukku Andhrula Hakku’ agitation.

RINL is now operating only two of the three blast furnaces. Among the two, one blast furnace is operated after signing MoU with JSPL. The net worth of the company has come down to Rs391 crore in FY23 from Rs13,659 crore in FY12.

Though SBI has agreed to give a working capital loan of Rs3,000 crore, the company is unable to avail it for want of Letter of Comfort (sort of counter-guarantee) from the Centre, a prerequisite to take loan as the land ownership is not with RINL.