U-turn on NMDC plant raises hopes on RINL revival

The steel plant needs tax holiday for some time and some working capital to the tune of Rs2,000 crore to make it a turnaround in no time - Neerukonda Ramachandra Rao, an INTUC leader

Breathing Life Into

♦ AP heading for Assembly polls

♦ Unions at VSP expecting privatization move may be shelved

♦ CCEA okayed disinvestment plan on Jan 27, 2021

♦ Since inception, VSP contributed Rs54,000 cr to the exchequer

♦ It created direct and indirect employment to 1 lakh people

♦ It’s land bank, machinery and other assets worth Rs3 lakh cr

Visakhapatnam: The U-turn made by the BJP-led NDA Government at the Centre on disinvestment of NMDC Steel Plant at Nagarnar in Chattisgarh, has raised hopes among the employees of Rashtriya Ispat Nigam Limited (RINL) that the privatisation of the Visakhapatnam-headquartered company will also be shelved.

Union Home Minister Amit Shah recently sprang a surprise by announcing the dropping of the stake sale process for Nagarnar Steel Plant during his visit to poll-bound Chattisgarh following an intensive attack on the Centre over the issue by the Congress government in that State.

As elections for Andhra Pradesh Assembly are due along with Lok Sabha in the next few months, there is high expectancy here that the strategic disinvestment of RINL, the corporate entity of Visakhapatnam Steel Plant (VSP) will be dispensed with.

BJP MP and national spokesperson GVL Narasimha Rao sometime back said Centre has ‘paused’ the decision to privatise RINL with a view to strengthen it.

While the Centre received multiple bids in response to Expression of Interest (EoI) notification for 3-million tonne Greenfield Nagarnar Steel Plant in January, the Department of Investment & Public Asset Management (DIPAM) is unable to invite EoI bids due to stalling of valuation by the merchant bankers.

The trade unions are fighting an agitation against 100 per cent privatisation decision since it was approved by the Cabinet Committee on Economic Affairs (CCEA) on January 27, 2021, by stopping attempts for valuation-a prerequisite for issuing EoI notification. RINL, which doesn’t have captive mines, has expanded its capacity from 3 million tonne to 7.3 million tonne in two phases with a total investment of Rs16,300 crore.

DIPAM expected to mop up Rs20,000 crore by selling 50.79 per cent stake sale in Nagarnar Steel Plant. DIPAM officials had earlier said they received a good response for disinvestment of the yet to be commissioned steel plant in Bastar district of Chhattisgarh.

“Vizag Steel Plant was born after a people’s movement under the banner of Visakha Ukku Andhrula Hakku. It’s symobol of Telugu pride for the then united Andhra Pradesh. The demand was conceded by Centre after sacrifice of 32 agitators in police firing, resignation of 52 Communist, 15 Swatantra Party MLAs and seven MPs,” Visakha Ukku Parirakshana Porata Samiti convener J Ayodhyaramu told Bizz Buzz.

He said that the steel plant was set up with an investment of Rs5,000 crore following surrender of lands by 16,500 project displaced families.

“Since its inception, we have contributed Rs54,000 crore to the exchequer in the form of taxes and dividends. It provides direct and indirect employment to as many as one lakh people,” he stated adding now the project has landbank, machinery and other assets worth Rs3 lakh crore. After privatisation decision, the unions launched a peaceful agitation, which will achieve a milestone with the completion of 1,000 days on November 8.

The unions, by and large, allege that due to political reasons, now RINL is deprived of raw materials like iron ore and coking coal forcing it slash production by shutting down one among three blast furnaces.

Steel Executives’ Association (SEA), the officers’ body of RINL has been demanding mega merger of RINL, NMDC and SAIL. The trade unions have also been insisting on the mega merger.

“What justification RINL has in shutting down one blast furnace and keeping it idle for a long time when Rs15,000 crore investment was made on this,” asked an employee.

INTUC leader Neerukonda Ramachandra Rao said the steel plant needs tax holiday for sometime and some working capital to the tune of Rs2,000 crore to make a turnaround in no time.