SteelMin Hints At Rs 9k-Cr Package For RINL

We urge the Centre that 20,000-acre land, which is in the name of the President of India, should be transferred to RINL to improve its net worth. The land value is estimated at Rs70,000 cr - J Ayodharam, honorary president, Steel Plant Employees’ Union (SPEU)

Visakhapatnam: The employees and their leaders may stop running from pillar to post if the promise made by Union Minister for Steel HD Kumaraswamy for revival of cash-strapped Rashtriya Ispat Nigam Ltd (RINL) comes true.

During meetings with the union leaders in New Delhi on Wednesday, Kumaraswamy told them that the Ministry of Steel is awaiting a clearance from the Ministry of Finance for sanction of nearly Rs9,000 crore as part of a revival package.

“Once the Ministry of Finance approves the package, a note will be prepared to place it before the Union Cabinet,” Kumaraswamy said, according to the union leaders, who returned to the city on Thursday.

The Cabinet Committee on Economic Affairs (CCEA) on January 27, 2021, took an in-principle decision to sell RINL, the corporate entity of Visakhapatnam Steel Plant (VSP), its subsidiaries and joint ventures lock, stock and barrel by way of 100 per cent privatisation. However, just before the general elections, the BJP-led NDA Government paused the privatisation decision. During his maiden visit to the steel plant along with MoS for Steel Bhupatiraju Srinivasa Varma immediately after getting inducted into Modi 3.0 Cabinet, Kumaraswamy emphatically ruled out privatisation and declared that efforts are on to put RINL back on the right track.

Unconfirmed sources told Bizz Buzz that after kicking off a one-time revival package with a fixed timeframe to improve its balance sheet, RINL will be allowed to be acquired by SAIL to make it a giant PSU. The unions, ever since the Centre’s decision for privatisation of RINL, which has an annual capacity of 7.3 million tonnes, have been on a warpath demanding retention of the company as a PSU as it is considered ‘Pride of Andhra people.’

At present, due to working capital crunch and raw material problem, RINL is able to operate only two blast furnaces, keeping one blast furnace idle for a long time. At one point of time, it had curtailed production drastically by operating just one blast furnace.

“The Minister categorically said that by mid-January there will be a very good news on RINL revival and asked us not to be afraid about its future,” INTUC national secretary Mantri Rajasekhar told Bizz Buzz.

RINL’s net losses have crossed Rs6,000 crore putting a big question mark about its future, the union leaders say. Steel Plant Employees’ Union (SPEU) honorary president J Ayodharam said to improve its net worth, 20,000 acres, which is in the name of the President of India, should be transferred to the name of RINL.

The land value, he said, is estimated at Rs70,000 crore at the prevailing market price. He quoted the Steel Minister as saying that originally they wanted to take up a package with Rs18,000 crore, but due to financial constraints, the Ministry of Steel recommended to pump in around Rs9,000 crore to revive the sick PSU.

As part of a multi-pronged approach, the Centre has already sanctioned nearly Rs1,600 crore in two phases to help RINL clear dues. There are indications, as part of the fresh revival package, the Centre may also consider interest holiday and scattered payment of loans to give RINL a breather to recover from the severe financial crisis it has been experiencing for the past several months. Allotment of captive mines is one of the major demands of the unions, to reduce cost of production substantially, besides monetisation of its surplus lands to a limited extent.