RINL investments in UP plant, OMDC go down the drain
Unions make fervent appeal to Steel Minister to retain it in public sector
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Visakha Ukku Parirakshana Porata Samiti, an umbrella organisation of trade unions with different affiliations, which is spearheading a peaceful agitation to drum up support against strategic disinvestment of RINL, feels that denial of captive iron ore mines and political pressure exerted on the company to invest in 'unviable' ventures are entirely responsible for draining out the cash reserves of RINL
Visakhapatnam: An investment of Rs 1500 crore in forged wheel plant at Rae Bareli in Uttar Pradesh and Rs 362 crore in Eastern Investment Limited (EIL) belonging to Bird Group of Companies by Rashtriya Ispat Nigam Limited (RINL) has gone down the drain, entailing a huge burden on the cash-starved Navratna company.
Visakha Ukku Parirakshana Porata Samiti, an umbrella organisation of trade unions with different affiliations, which is spearheading a peaceful agitation to drum up support against strategic disinvestment of RINL, the corporate entity of Visakhapatnam Steel Plant, feels that denial of captive iron ore mines and political pressure exerted on the company to invest in 'unviable' ventures are entirely responsible for draining out the cash reserves of RINL.
RINL has paid a huge amount of Rs 700 crore as penalty following court orders due to no fault of the company. "This was done due to alleged 'illegal' mining done by OMDC before it became a subsidiary of RINL for which we are not at all responsible," Samiti co-chairman and recognised union general secretary belonging to AITUC D. Adinarayana told Bizz Buzz on Thursday. Established in 1918, Orissa Minerals Development Company Limited (OMDC) is a mining company that was merged with RINL.
He said that the investment in a forged wheel plant at Rae Bareli and EIL with the promise of getting partial raw material security by sourcing iron ore from the mines belonging to OMDC in Odisha has turned into a white elephant.
"We have not only invested in plant and machinery to supply forged wheels with a production capacity of one lakh units per annum to Indian Railways, but also are paying lease rent on land given by the UP Government. At the same time, OMDC became a subsidiary of RINL on January 5, 2011. so far not a single tonne of iron ore could be brought to Visakhapatnam from its mines due to court cases," he pointed out.
The unions of RINL allege that the investments made due to orders from the government were nothing but misuse of public money with some vested interests.
RINL has not received any government assistance when it went for expansion from 3.2 MT to 6.3 MT with an investment of Rs.12,291 crore and 6.3 MT to 7.3 MT PA with an estimated investment of Rs.4,000 crore.
The Cabinet Committee on Economic Affairs (CCEA) meeting held on January 27, 2021 accorded in-principle approval for 100% disinvestment of Government of India (GoI) shareholding in RINL along with its (RINL's) stake in its subsidiaries/joint ventures.
VSP was established after a massive struggle called "Visakha Ukku Andhrula Hakku" with the sacrifice of life in police firings at various places by 32 people in united Andhra Pradesh in 1966. All opposition party's MPs and MLAs had resigned in protest against the then ruling Congress party's decision of not allotting a fifth integrated steel plant in Visakhapatnam. Due to consistent pressure Prime Minister Indra Gandhi had to concede the demand in early 1970s.
The people of Visakhapatnam made many sacrifices by giving away 22,000 acres of land and families displaced from 68 villages for the establishment of the steel plant, said the office-bearers of Visakha Ukku Parirakshana Porata Samiti.
Adinarayana and samiti co-chairmen Ch. Narsinga Rao and Mantri Rajasekhar represented to new Union Minister for Steel Jyotiraditya Scindia that RINL if given captive mines with some policy incentives can be put back on the right track.
