Modi 3.0 may finalise fate of RINL

Visakhapatnam: The fate of privatisation of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, which has not been pursued vigorously despite clearance from the Cabinet Committee on Economic Affairs on January 27, 2021, due to the pandemic and the subsequent market slowdown may be taken up aggressively if the BJP-led NDA coalition gets the mandate for formation of Modi 3.0.

While the employees of the gigantic steel plant, the first shore-based integrated steel plant in India, are on a warpath following the decision on privatisation, the Opposition parties as well as the YSRCP Government in Andhra Pradesh have strongly opposed any move to hand over RINL to private hands as the steel plant is 'pride of Telugu-speaking people.' The steel plant was established following an agitation spearheaded under the banner of 'Visakha Ukku Andhrula Hakku' after the death of 32 protesters at various places in police firing.

"We have been insisting on retaining its as a public sector unit (PSU) in the larger interest of the employees and the people of Telugu-speaking States and explore merger of RINL with SAIL for mutual benefit and make it a single giant steel entity in the world," AITUC national vice-president D Adinarayana, told Bizz Buzz.

With TDP and Jana Sena Party forming a tripartite alliance, it is to be watched what will be the strategy of the top leadership of the saffron brigade post-polls. Notwithstanding high expectation on a declaration not to privatise RINL in view of elections on the lines of promise made by Home Minister Amit Shah in Chattisgarh to drop privatisation of Nagarnar Steel Plant set up near Jagdalpur by NMDC with an investment of Rs 20,000 crore, Prime Minister Narendra Modi at his maiden rally by the NDA at Chilakaluripet last month did not mention anything regarding the steel plant.

RINL, popular under its brand name Vizag Steel, faces a daunting task with its debts estimated at around Rs 22,000 crore with an annual servicing commitment of Rs 3,000 crore. To overcome severe working capital crunch, the management had tied up with Jindal Steel and Power Ltd (JSPL) to revive Blast Furnace-3 during last year. It has sold some lands at HB Colony and two other areas in the first phase of auction to mop up funds. The company signed a MoU with Tata International to procure raw materials through Letter of Credit (LoC). It is in talks to give land on lease to NMDC to set up a pellet plant near the steel plant.

As part of turnaround plan, RINL management is exploring selling its forged wheel plant with a capacity of 1 lakh units a year at Rae Bareli in Uttar Pradesh to the Railways. It has a 30-year offtake commitment. The Rae Bareli plant was established in collaboration with SMS Germany with an investment of about Rs 2350 crore. Unlike other major steelmakers, RINL is deprived of captive iron ore and coal mines. It has been pursuing captive mines in Odisha, Chattisgarh and Andhra Pradesh for a long time. Taking up a PIL filed by Praja Shakti Party president KA, Paul and former Joint Director of CBI VV Lakshminarayana, the Andhra Pradesh High Court recently directed the Union Government to explain under what law privatisation decision has been taken and to submit details on the alternatives suggested by Andhra Pradesh Chief Minister YS Jagan Mohan Reddy vide a detailed letter to the Centre and suggestion of KA Paul to open an account under Foreign Contribution Regulation Act (FERA) to explore investments from abroad. The court regretted that nothing was mentioned about the letter in the counter affidavit submitted by the Centre. The case has been posted for hearing

on April 24.