AP, Centre likely to cross swords over RINL

Visakhapatnam: The political atmosphere in Andhra Pradesh is hotting up with the State Government making it clear that to stop privatisation of Rashtriya Ispat Nigam Limited they would go to the extent of bidding for its takeover.

Various political parties including a section of Bharatiya Janata Party have also joined 'say no to RINL privatisation' campaign by expressing their anguish for not consulting them before taking such a crucial decision. The Cabinet Committee on Political Affairs gave it's in principle approval for 100 per cent strategic disinvestment of Government of India-owned RINL, the corporate entity of Visakhapatnam Steel Plant, along with management control by way of privatisation.

State Industries Minister Mekapati Goutham Reddy went on record saying that to stop privatisation, they would go to the extent of bidding on behalf of the State Government to acquire RINL.

One of his aides told Bizz Buzz on Tuesday that the government was of the firm conviction that RINL could achieve a turnaround if the Centre allotted captive mines drastically bringing down its production cost.

Incidentally the steel plant is the only major steel producer with a capacity of 7.3 million tonne which without its own iron ore mines.

Late Ajit Jogi, then Chief Minister Chhattisgarh had also wanted to bid for disinvestment of Bharat Aluminium Company Ltd (BALCO), India's third largest aluminium producer, by offering Re.1 more that what Sterlite Industries offered to acquire part of Centre's shareholding in 2001.

Rival trade unions have joined hands leading an agitation against privatisation bid by trying to raise the emotions saying Visakhapatnam Steel Plant was set up after students' agitation in undivided Andhra Pradesh in 1960s and early part of 1970s which claimed the lives of 32 agitators in fire police firing including 12 in a single incident near Old Post Office here 1970. The agitation was very often described as 'Visakha Ukku Andhrula Hakku' (steel plant in Vizag is the legitimate right of Andhra people). "Capacity augmentation and raw material security can prevent RINL being handed over to private hands. Selling 20 per cent stake in early 2000s could have helped in becoming a zero debt company by preventing the thought of strategic sale or else whatever it earns will go towards debt servicing," RINL former Chairman-cum-Managing Director Y Siva Sagar Rao said.

YSRCP leaders including Tourism Minister Muttamsetti Srinivasa Rao and MP MVV Satyanarayana participated in the all-party meeting and said Chief Minister Y S Jagan Mohan Reddy had already sent a letter to Prime Minister Modi protesting the decision. TDP MLA and former Minister Ganta Srinivasa Rao submitted his resignation to the Speaker protesting against privatisation decision.

BJP national general secretary Daggubati Purandeswari and MLC P V N Madhav said they would try to convince the party leadership not to go ahead with the privatisation decision due to emotions attached to the steel plant.

CITU State president Ch Narsinga Rao said successive governments had ignored the demand for captive mines deliberately to make RINL sick. RINL, in which the Centre is said to have invested around Rs 5,000 crore since its inception, suffered a lot due to long gestation to commence operations.

RINL, which escaped falling into BIFR net in late 1990s, incurred a loss of Rs 1,369 crore in 2017-18, made a marginal profit of Rs 97 crore in 2018-19 and again recorded a net loss of Rs 3910 crore in 2019-20. The company expanded from three million tonne to 6.3 million tonne by investing about Rs 12,300 crore and modernised blast furnaces and other critical facilities to increase the capacity further to 7.3 million tonne with an investment of Rs 4,000 crore.