Centre ignores pleas for rollback of decision

Visakhapatnam: IN the first major step to hand over Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant to private hands, the Central Government has sought separate bids for engaging transaction advisor and legal advisor.

The RFPs reiterate the government's firmness to go ahead with its decision to offload its 100 per cent shareholding as part of strategic disinvestment.

With this, the representations and appeals made by Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy, various trade unions and political parties including a section of local BJP leaders to withdraw the decision on privatisation have been ignored. The Cabinet Committee on Economic Affairs (CCEA) on January 27 accorded in-principle clearance to the proposal for 100 per cent disinvestment of RINL, its subsidiaries and joint ventures by selling 100 shareholding of the Government of India by way of privatisation.

Jagan Mohan Reddy, who wrote two letters and moved a resolution in the Assembly had appealed to the Centre to drop the privatisation move to respect Telugu pride. He stated that the demand for steel plant was conceded by then Prime Minister Indira Gandhi in 1970 after an agitation known as 'Visakha Ukku Andhrula Hakku' claimed 32 lives. Reddy had proposed allotment of captive iron ore mines in Odisha to reduce production cost, converting high-interest loans into equity to save an estimated Rs 3,000 crore, exploring stock option and monetisation of 7,000 of 20,000 acres under possession of the steel plant to put it back on profit path.

In a late evening notification on Wednesday, the Department of Investment & Public Asset Management (DIPAM), which is under the Ministry of Finance, invited Request for Proposals (RFP) for appointment of transaction advisor and legal advisor. This will be part of government plans to realise revenue by way of disinvestment. DIPAM has set July 28 as the deadline for submission of bids. While merchant bankers or consulting firms are eligible for engaging as transaction advisors to manage strategic disinvestment along with conducting roadshows, the legal advisor's job will be to take care of legal implications regarding assets and liabilities. Visakhapatnam Steel Plant had increased its capacity from three to 6.3 million tonnes with an investment of Rs.12,300 crore and subsequently further increased the capacity to 7.3 million tonnes by increasing techno-economic parameters and undertaking capital repairs on the blast furnaces by spending Rs.4,000 crore.

The target set for current financial year is Rs.1.75 lakh crore. Along with RINL, Bharat Petroleum Corporation Ltd, Shipping Corporation of India, Air India, Container Corporation of India Ltd and Neelachal Ispat Nigam Ltd are being finalised for disinvestment.

According to DIPAM, the CCEA has delegated powers to Alternative Mechanism (AM) whose constitution was approved by CCEA on 16.08.2017 to, inter-alia decide on proposals recommended with regard to time of disinvestment, pricing, the terms and conditions of sale, inclusion or otherwise of mines/subsidiaries/stake/(s) in joint ventures in the transaction and any other issue(s) related to this transaction.