Centre may take crucial decision on future of RINL ahead of polls

Visakhapatnam: The formation of alliance by the BJP with TDP-Jana Sena Party combine in Andhra Pradesh has rekindled hopes among the trade unions of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant that the Centre may reverse its decision on privatisation of the Navratna company or explore other options to prevent its strategic disinvestment.

Though there is no confirmation on the buzz, the unions believe that as BJP is keen on winning more seats from South India, being the reason why it aligned with TDP-JSP to increase its strength from Andhra Pradesh in Lok Sabha. The BJP-led NDA government might make a declaration ahead of the elections on the lines of decision made by Home Minister Amit Shah to not go ahead with disinvestment of Nagarnar Steel Plant, set up by NMDC with an investment of over Rs 20,000 crore near Jagdalpur in Chhattisgarh as a prelude to the elections to the Assembly there. Now with BJP back in power in Chhattisgarh, the Centre is believed to have decided not to go ahead with disinvestment of 50.79 per cent of equity in the integrated Nagarnar Steel Plant.

"BJP is pressing for contesting six Lok Sabha seats as part of alliance and is insisting on allotment of Visakhapatnam and Rajahmundry from its allies. Hence, we hope that Prime Minister Narendra Modi at the proposed joint rally at Chilakaluripet near Guntur on March 16 or 17 will make an announcement on the future of RINL in deference to larger public interest," Visakha Steel Employees' Congress (VSEC) president Neerukonda Ramachandra Rao told Bizz Buzz on Monday.

Due to heavy debt burden and high production cost for want of captive mines, RINL is battling for existence. Severe working capital crunch has forced the management to resort to various bold decisions like land monetisation and joint venture to run a third blast furnace with Jindal Steel & Power Plant (JSPL). There is also an exercise to sell forged wheel plant owned by RINL at Rae Bareli in Uttar Pradesh, giving its surplus land near the steel plant on a 33-year lease of 1150 acres to NMDC to get nearly Rs 1500 crore towards lease rent to set up a pellet plant. The forged wheel plant is expected to fetch around Rs 1500 crore to Rs 2000 crore. National Land Monetisation Corporation Ltd (NLMCL) and NBCC (India) have been engaged for auction of 67,227 square yards of developed plots at HB Colony (Maddilapalem) and two other locations at an upset price of Rs 480 crore. The MoU to re-start blast furnace-3 will give it working capital advance/raw materials worth Rs 800 to Rs 900 crore to produce 90,000 blooms per month from Steel Melt Shop-2.

At present, RINL is facing an unprecedented crisis delaying disbursement of salaries to all categories of employees. The employees' unions as well as the officers' organisations have also been demanding wage revision, which was due for a long time, to boost their morale.

Though the Cabinet Committee on Economic Affairs decided in-principle for strategic disinvestment of RINL on January 27, 2021, the Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance has not been able to call for EoI bids due to stiff opposition by the employees to send merchant bankers for valuation of the company. "If valuation is done, there will be an attempt to sell the company for a song by undervaluing its assets. As per our estimates, the company's assets going by machinery and huge land bank will not be less than Rs 3 lakh crore," CITU-affiliated Steel Plant Employees' Union president J Ayodharam pointed out.