Eyeing land bank, Adani, POSCO in race for RINL?

Visakhapatnam The controversy over the disinvestment of Rashtriya Ispat Nigam Ltd (RINL) has taken a new twist with several trade unions seeing a conspiracy by South Korean steel giant POSCO and the Adani Group to take over the Visakhapatnam-headquartered Navaratna firm.

RINL, the corporate entity of Visakhapatnam Steel Plant (VSP) with a land bank of 20,000 acres and a few subsidiaries and joint ventures, is now facing severe working capital crunch forcing the company to slash its production. The financial woes aggravated after the company went for capacity augmentation in phases in the past from three million tonne per annum to 7.3 MTPA at an estimated investment of Rs16,300 crore. As the company does not have captive iron ore and coking coal mines, unlike other major steel manufacturers it is being forced to spend huge amounts towards sourcing the raw material.

AITUC national leader D Adinarayana and State CITU State general secretary Ch Narsinga Rao, both co-chairpersons of Visakha Ukku Parirakshana Porata Samiti, told Bizz Buzz separately that as per their information, there is an attempt by the Adani Group and POSCO to bring pressure on the powers-that-be so that they could acquire RINL with an eye on its land bank.

“As we have a large parcel of lands, Adani Ports and Special Economic Zone (APSEZ), which bought Gangavaram Port, a PPP project, can go for massive expansion,”said Adinarayana, the recognised union leader of RINL.

During the recent visit to New Delhi, the union leaders of RINL approached the Union Ministers and bureaucrats and appealed to them to withdraw the disinvestment process and retain RINL in the public sector.

“We also asked them to allow RINL to take over Gangavaram Port from the Adani Group,” Adanirayana said. After an attempt by a section of employees of the steel plant to barge into the port premises in protest against disruption on supply of coking coal by the Gangavaram Port for failure to pay handling charges on time, the Adani Group through a press release emphatically denied the charge and stated that it had no interest in the disinvestment of RINL.

Narsinga Rao said the port management had unilaterally increased the handling charges every year thereby causing a huge burden on RINL management. He said as the port is located in the backyard of the steel plant, RINL provides a lot of revenue to the Adani Group. Union leaders say only Rs56 crore RINL management has to pay to the port.

As per the DPR prepared for establishment of steel plant in Visakhapatnam, a captive jetty was planned at Gangavaram to meet its requirement. However, the TDP regime before bifurcation had alienated 1,100 acres of RINL at Gangavaram by convincing the then central government for construction of a port under PPP mode by signing an MoU with DVS Raju-led consortium amid protests by various political parties and unions.

Subsequently, Gangavaram Port was acquired by APSEZ by buying 58.1 per cent equity put up by DVS Raju-led consortium and 31.5 per cent held by Walburg Pincus. After a study by a high-power committee, the Andhra Pradesh government also sold its 10.4 per cent equity it got in lieu of land given to the port for an amount of Rs645 crore, thereby facilitating 100 per cent acquisition of stake in the port in 2021.