BJP leader's promise raises fresh ray of hope on mega merger of steel PSUs

Visakhapatnam: The promise by a prominent leader of BJP from North Andhra to take up the proposal for the mega merger of Rashtriya Ispat Nigam Limited (RINL), Steel Authority of India Limited (SAIL) and National Mineral Development Corporation (NMDC), all under the administrative control of Ministry of Steel, with the Central leadership has raised a fresh ray of hope among trade unions and officers' associations on putting them on back on profitability and pose a firm challenge to leading steel manufacturers of the world.

BJP MLC PVN Madhav during a recent visit to Ukkunagaram interacted with Steel Executives' Association (SEA), the officers' body of Visakhapatnam Steel plant, promised to convince the party leaders to consider the proposal to save RINL-the corporate entity of VSP, from privatisation. He also mentioned how peaceful struggles had led to retaining Dredging Corporation of India Limited (DCIL), Bharat Heavy Plates and Vessels (BHPV) and Hindustan Shipyard Limited (HSL) in the public sector.

It may be recalled that DCIL disinvestment was shelved by the NDA Government after a consortium formed by four major ports led by Visakhapatnam Port Authority picked up Government of India equity in the company. HSL, which was under the Ministry of Shipping, was subsequently transferred to the Ministry of Defence. BHPV, which had suffered heavy losses, was acquired by Maharatna BHEL.

The unions and officers bodies contend that formation of a mega steel company with the amalgamation of three PSUs will pose a formidable challenge to major steel manufacturers in the world. It will be mutually beneficial because NMDC is a mining major and owns several blocks of iron ores in Bailadila of Chattisgarh. It also forayed into pellet and steel-making by setting up a three million tonne integrated steel plant at Nagarnar, which is now being put up for sale as part of strategic disinvestment. Nagarnar Steel Plant, on which an investment of Rs.23,140 crore has been made. It is established with Hi-Smelt Technology to take advantage of easy access to raw material. The plant is set up in an area of 2,000 acres in Bastar district of Chattisgarh. It is scheduled to go for demeger in FY 23.

RINL's steel plant here has a capacity of 7.3 million tonnes. It has a severe cash crunch due to heavy loan liability. There is no working capital and cash reserves to invest in further investment. The steel plant incurs heavy production cost for want of raw material scarcity. SAIL units are incurring losses due to heavy establishment and overhead costs. Its workforce can be redeployed in other units and the steel plants under its ownership can go for technological upgradation if a mega merger proposal is conceded.

SEA president Katam S.S. Chandra Rao and general secretary KVD Prasad told Bizz Buzz on Sunday that they are of firm conviction the mega merger will be mutually beneficial and help the Centre and States concerned to earn a lot of revenue. SEA along with Steel Executives Federation of India (SEFI) and National Confederation of Officers' Association of Public Sector Undertakings (NCOA ) have decided to continue their efforts by seeking the support of all MPs and leaders of political parties. The employees say the Visakhapatnam Steel Plant under Government will directly help the growth and prosperity of Andhra Pradesh formed in 2014 because amalgamation of three PSUs. They say the mega PSU will also create huge employment for locals as well as other States.