'Captive mines, loan waiver can help put RINL back on right track'

Visakha Ukku Parirakshana Porata Committee (VUPPC) is continuing a peaceful agitation for over 500 days against the decision to privatise Rashtriya Ispat Nigam Limited (RINL), its joint ventures and subsidiaries. The steel plant, India's first shore-based steel plant, was set up after 'Visakha Andhrula Hakku' agitation, which saw the death of 32 people in police firing incidents at various places across undivided Andhra Pradesh. The struggle which started over five and half decades ago is still continuing albeit differently for its birth and now for its continuation as a public sector unit.

"Come what may with the support of the people, all the unions will continue our struggle to bring pressure on the Central Government to withdraw its decision to privatise RINL and come forward with a one-time revival package to put it back on the right track," says Visakha Ukku Ukku Parirakshana Porata Committee chairman and CITU State president Ch Narsinga Rao.

Rao, who has authored a book 'Visakha Ukku Mahodhyamam' and later the English version christened 'Visakha Ukku Andhrula Hakku-a saga of struggle continues,' tells Bizz Buzz in an exclusive interview that they are of the conviction that there is a hidden agenda to hand over RINL to Korean steel giant POSCO on a golden platter as part of strategic disinvestment.

What is the purpose behind Centre's decision to disinvest/privatise public sector units?

The intention of the Central Government led by Prime Minister Narendra Modi on the issue of shaping the future of Central Public Sector Enterprises (CPSEs) is crystal clear. Finance Minister Nirmala Sitharaman had informed the Parliament that they don't want to run CPSEs and either they will go for permanent closure or strategic disinvestment. The Cabinet Committee on Economic Affairs (CCEA) on January, 27, 2021 gave its 100 per cent approval for cent percent disinvestment of RINL, popular as Visakhapatnam Steel Plant or Vizag Steel Plant, its joint ventures and subsidiaries through strategic sale by way of privatisation.

What are the grounds on which you are strongly opposing RINL's strategic disinvestment?

RINL is pride of Andhra Pradesh as well as Telangana as it was established after 'Visakha Ukku Andhrula Hakku' agitation which led to sacrifice of 32 lives in police firing at multiple locations forcing then Prime Minister late Indira Gandhi to concede the demand for establishing India's first shore-based integrated steel plant at Visakhapatnam. After some teething problems, it was commissioned in 1992. Come what may, we will not allow it to go to private hands. The aspirations of the people, who laid down their lives and many who faced police bullets and got brandished by batons of 'men in khaki' during the agitation for its (VSP's) establishment, has to be protected.

Do you think the rich land bank of RINL is the reason for Niti Aayog and CCEA clearing the decision for 100 per cent privatisation of RINL?

It's precisely because of its rich land bank. It (RINL) is in possession of 22,000 acres. Everyone has set eyes on grabbing its land. The steel plant is also strategically located close to the shores of Bay of Bengal giving it the freight advantage. Originally, the Detailed Project Report (DPR) prepared for VSP, a captive jetty was mooted at Gangavaram, on its backyard, so as to put the freight cost at bare-minimum. It's a different story that due to vested interests, a private port was allowed by the powers-that-be at Gangavaram by alienating part of the lands belonging to RINL. POSCO had set its eyes on RINL and its lands in 2019 itself when, it signed MoU to enter into a joint venture for investing on a high-end greenfield steel plant at Ukkunagaram in a hush-hush manner. Later POSCO changed its strategy. This has proved our apprehensions true that the BJP-led NDA Government has a hidden agenda behind its decision for disinvestment of RINL. We are of the opinion that the government wants to hand over VSP with its rich land bank on a golden platter to POSCO due to vested interests. It is unfortunate that the government wants to bulldoze public opinion as the State Legislative Assembly has unanimously adopted a resolution with a plea to retain the public sector. Barring BJP, all other parties and trade unions, setting aside their differences, have come to a common platform to demand withdrawal of the decision to privatise RINL.

VUPPC has been on agitation for over 500 days. Is there any response till date?

The response is crystal clear. Due to groundswell of support for safeguarding the interest of RINL, its workforce and the people of Visakhapatnam who don't want RINL to go to private hands, the Centre has slowed down on the disinvestment process. So far, the merchant bankers have not ventured into the Visakhapatnam Steel Plant premises for due diligence study. Without valuation, nothing can be done you know. Our unions as well as the families who are displaced and waiting to get jobs as promised at the time of surrendering their lands for the steel plant, are very firm in not allowing anybody to make surveys or any assessment on the value of RINL assets. The displaced families also hope that they can get employment in future in the expansion projects or some other work if RINL is retained as a CPSE.

What is the status of the RINL disinvestment process by the Department of Investment and Public Asset Management (DIPAM)?

So far there is not much progress though DIPAM is involved in an exercise for going ahead with privatisation with the appointment of transaction and legal advisors. But there is a break in the bidding process as there is no due to stiff opposition to disinvestment after the people saw how Zinc Smelter belonging to Hindustan Zinc Limited was shut down and the employees were forced to opt for 'voluntary separation.'

POSCO joint venture plan is dropped after decision on RINL privatisation?

Technically yes but the fact is instead of joint venture POSCO wants to takeover RINL so that it can mint money with a tacit understanding with the people calling the shots in New Delhi. RINL asset valuation as made in 2013 was Rs 4,989 crore in 2013. It was undervalued for obvious reasons as the actual value at that time was much more. Now as per a conservative estimate, the value will be more than Rs 3 lakh crore. Trade unions are successful in retaining HSL, BHPV and DCI in the public sector. Nothing worked out in the case of Hindustan Zinc Limited.

Are you confident of retaining RINL in the public sector after the Centre turned down requests for granting captive mines and merging it with SAIL or NMDC? Your comments...

Absolutely right! Trade unions were successful in stopping privatisation of Hindustan Shipyard Limited (HSL), which was later taken over from the Ministry of Shipping by the Ministry of Defence. Bharat Heavy Plates and Vessels (BHPV) were not privatised as the employees peacefully agitated and prevented the visit by private parties to visit the plant of BHPV. Subsequently, BHEL took it over. Dredging Corporation of India Limited (DCIL) was supposed to be privatised but then Shipping Minister Nitin Gadkari allowed four major ports viz Visakhapatnam, Paradip, Deen Dayal (Kandla) and Jawaharlal Nehru Port Authority to acquire Government of India equity in the Visakhapatnam-headquartered public sector. HZL was the only casualty as first the government shut down Zinc Smelter, forced employees to take whatever benefits they offered and later what happened is known to everyone.

What's your remedy to enable RINL to reduce production cost and achieve a turnaround?

Allotment of captive mines is the only solution to put RINL back on a profitable track. Successive governments due to reasons best known to them ignored the need to grant captive iron ore and coal mines while giving Jindal, Tata and other major steel producers to own mines. This is the biggest handicap for RINL due to which it is forced to shell down heavy amounts towards producing steel products. It is shocking that RINL is incurring an additional burden of Rs 2,000 crore per annum compared to other steel plants as it is devoid of captive mines. Actually, the original decision was to allot Block No. 5 of Bailadila iron ore mines in Chattisgarh belonging to NMDC to RINL. It was mentioned in the DPR also. We want a one-time revival package by granting captive mines and writing off of loans and the interest accrued on it till date. If the Centre sees reason in our suggestion, RINL will become one of the best steel companies in the world in a few years.