BRS in talks with YSRCP for joint fight against RINL privatisation

Though details are not known to us, we welcome the BRS initiative to take part in the EOI. However, our first foremost demand remains for merger of RINL with NMDC and SAIL or SAIL alone as a viable alternative to meet long-term objectives of achieving Atmanirbar Bharat, AITUC national vice-president D Adinarayana said

Visakhapatnam: A few days after Bharat Rashtra Samithi (BRS) working president and Telangana Industries and IT Minister K T Rama Rao wrote an open letter to the Centre to immediately release Rs 5,000 crore to help Rashtriya Ispat Nigam Limited (RINL) tide over working capital crunch, its Andhra Pradesh unit president Thota Chandrasekhar on Monday called on the union leaders here to express solidarity with their 788th day VSP relay strike against privatisation.

Chandrasekhar during his talks with the RINL leaders, who declared a warpath against the disinvestment decision, said BRS is keen to stop privatisation. He said they are also in talks with the YSRCP Government in Andhra Pradesh for a joint fight to stop privatisation.

The Centre has launched an exercise for strategic disinvestment of RINL, the corporate entity of Visakhapatnam Steel Plant, by way of 100 per cent privatisation. On the other hand, RINL sought EOI on March 27 inviting proposals for working capital funding and raw material supply in exchange of finished steel products as a barter deal. As the last date of April 15 is fast nearing, the Telangana Government headed by Chief Minister and BRS national president K Chandrashekar Rao announced its resolve to respond to the bid through Singareni Collieries Company Limited (SCCL).

In SCCL which has captive coal mines, Telangana Government has 51 per cent equity and the remaining is held by the Government of India. BRS organised a maha dharna coinciding with the recent visit of Prime Minister Narendra Modi to Hyderabad in protest against, what it alleged, Centre’s machinations to privatise Singareni Coalfields.

Though SCCL does not have any experience in the steel sector, industry sources say it may procure iron ore, the main raw material from the market and borrow loans to provide working capital to RINL by issuing government-guarantee. Again the finished steel it gets in lieu of funding and raw material, SCCL may sell it to the prospective buyers to get return on its investment.

“Though details are not known to us, we welcome the BRS initiative to take part in the EOI. However, our first foremost demand remains for merger of RINL with NMDC and SAIL or SAIL alone as a viable alternative to meet long-term objectives of achieving Atmanirbar Bharat,” RINL recognised union leader and AITUC national vice-president D Adinarayana told Bizz Buzz.

At present, VSP, India’s first shore-based steel plant has a production capacity of 7.3 million tonnes per annum. However, it is not able to run all the blast furnaces due to the financial crisis and raw material insecurity. RINL is the only major steel producer without captive mines forcing it to shell down more on production cost unlike SAIL, Tata Steel and JSW Steel. Notwithstanding several hardships, RINL registered around Rs 23,000 crore turnover in FY 2022-23 by operating only two blast furnaces and shutting down another January, 2022 for want of coking coal and working capital.

“RINL could not achieve its rated capacity due to the financial crisis. RINL hasn’t had captive iron and coal mines since inception. As a result, our production cost is Rs 6,000 to Rs 7,000 more per tonne over steel plants in India. SAIL is having excessive iron ore fines in its mines. RINL is purchasing iron ore from NMDC at market price. On account of iron ore only RINL is bearing Rs 4,000 to Rs 5,000 extra for producing one tonne of crude steel,” Steel Executives’ Association (SEA) president Katam S S Chandra Rao and general secretary K V D Prasad said in a representation to Union Steel and Civil Aviation Minister Jyotiraditya Scindia.