Abrupt RINL Leadership Change Sparks Merger Talks With SAIL

Visakhapatnam: The sudden decision of Rashtriya Ispat Nigam Limited (RINL) Chairman-cum-Managing Director Atul Bhatt to go on leave till completion of his tenure and the appointment of Director (Projects) Arun Kumar Bagchi as the incumbent CMD till November 30 has set off speculation on various probabilities.

The Ministry of Steel in its order dated September 9, 2024 stated: “With approval of the competent authority, the current charge of the post of CMD, RINL, is assigned to Shri Arun Kumar Bagchi, Director (Projects), RINL up to November 30, 2024 or till assignment of additional charge or regular appointment, whichever is earlier, in view of the leave sanctioned to present CMD, RINL w.e.f. September 9, 2024 to till the end of his tenure i.e. up to November 30, 2024. This charge arrangement will be in terms of instructions contained in DoPT’s OM No.26(3)/EO/2024(ACC) dated 17.08.2005.”

The decision to go on leave is perceived as a sequel to a directive by Union Minister for Steel HD Kumaraswamy around two weeks ago, sources told Bizz Buzz on condition of anonymity. Following the change, there is speculation that the trade unions’ demand for merger with SAIL may be considered. There is also buzz that RINL, the corporate entity of Visakhapatnam Steel Plant could be made a subsidiary of SAIL.

RINL, India’s first shore-based integrated steel plant, is facing a worst-ever financial crisis due to working capital crunch, heavy production cost on account of sourcing iron ore and coking coal, the two major raw materials required for steelmaking and severe loan liability on account of expenditure incurred on capacity augmentation and delay in clearing its outstanding borrowings from financial institutions and increasing arrears towards procuring raw material from NMDC and others. The company spent nearly Rs 16,300 crore to enhance production capacity from three to 7.3 million tonnes.

One of the reasons attributed by the trade unions for the sudden development is said to be certain allegations on procurement of inferior quality of ferroalloys and silicon alloys at a higher cost. Incidentally, Bhatt’s leave sanction also coincided with completion of two months of the widely-publicised announcement by Kumaraswamy and Union Minister of State for Steel Bhupathiraju Srinivasa Varma during their visit to Visakhapatnam Steel Plant, popular as Vizag Steel, with an emphatic announcement that a good news would be announced within two months to strengthen RINL.

“RINL needs ferroalloys and silicon alloys for steelmaking amounting to Rs 1200 crore per annum. Instead of 60 per cent quality, the raw material bought by the management had 30 to 40 per cent quality. Twenty four kg of this raw material is required to produce a tonne of steel. The complaint on this is under probe by the CBI,” Visakha Steel Employees’ Congress (VSEC) president Neerukonda Ramachandra Rao, told Bizz Buzz on Tuesday. Sources said Kumaraswamy has mooted a revival package for RINL at a cost of Rs 12,000 crore or grant working capital of Rs 5,000 crore and merge it with SAIL or make it a subsidiary of SAIL. Sources said the Ministry of Steel was also scheduled to have a meeting with the Directors of RINL to take stock of the situation.