MP seeks ease in vizag Steel Plant's working capital

Huge annual interest burden at Rs 2,500 crore due to high interest rates, lack of captive iron ore mines, high cost of purchased raw materials and vacant management level positions in RINL is hampering the decision making process

Visakhapatnam: Rajya Sabha MP and BJP national spokesman G V L Narasimha Rao on Thursday met Union Steel Minister Jyotiraditya Scindia and sought his intervention for easing the working capital problem for Visakhapatnam Steel Plant's full-fledged functioning.

Rashtriya Ispat Nigam Limited (RINL), the corporate entity of VSP, has been listed by the Central government for strategic disinvestment by way of 100 per cent privatisation.

Narasimha Rao, known as GVL, during his meeting with Scindia sought his ministry's intervention to end the severe working capital problem being faced by VSP's full-fledged operations.

In a letter submitted to the minister, he noted that non-availability of working material, high raw material cost and adverse market conditions have affected functioning of the steel plant. This is adversely impacting the financials of RINL in the present year which made a net profit of Rs 913 crore last year. In addition to non-availability of working capital, huge annual interest burden of RINL at Rs 2,500 crore due to high interest rates, lack of captive iron ore mines, high cost of purchased raw materials and vacant management level positions in RINL which is hampering decision making process were highlighted by the GVL in his letter.

Stating that a strong, vibrant, profitable RINL is a major contributor to the economy of Visakhapatnam region in particular and Andhra Pradesh as a whole, he stated that efficient and successful operation of VSP ought to be a national priority.

Expressing satisfaction over his meeting with the Steel Minister, the MP stated that Scindia assured him that the working capital problem would be resolved soon and the ministry will make arrangements for raw material supply to the VSP on an advance basis. This will be done to increase capacity utilisation of RINL, GVL quoted the Steel Minister as having assured him.