RINL employees staring at uncertain future
There is no clarity on the stands taken by many on the future of RINL, which has tremendous potential to make a turnaround, K K Rao, former Director (Operations) of RINL, tells Bizz Buzz
image for illustrative purpose
Visakhapatnam: For the employees of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), the largest public sector unit in the two Telugu-speaking States, life ahead is totally uncertain.
After its plans for IPO (initial public offer) route to mop up funds to meet the working capital requirement were deferred twice a decade ago due to volatile conditions of the market and efforts for a joint venture with Korean steel giant POSCO which eyed the surplus lands of VSP, fell flat, the Modi government announced its strategic disinvestment decision in January 2021, leaving the employees in a limbo. The recent statements in Visakhapatnam during a day long visit on Thursday by Union Minister of State for Steel and Rural Development Faggan Singh Kulaste created more confusion. In the morning he told a section of the media at the Rozgar Mela function that ‘as of now we are not considering privatisation of RINL and the Centre is keen on strengthening it and addressing the raw material availability problem.’
In the evening during talks with the union leaders, he claimed that he was not competent to talk about privatisation issue as the Cabinet Committee on Economic Affairs (CCEA) has accorded in-principle decision for disinvestment of RINL, its subsidiaries and joint ventures by way of 100 per cent privatisation.
As per its corporate vision, RINL wanted to expand its capacity from 7.3 million tonnes to 12 million tonnes with an investment of Rs 20,000 crore after investing Rs 16,300 crore on increasing capacity from 3.2 to 7.3 million tonnes in two phases. It is the only major steelmaker in India without any captive mines. As consequence, the steelmaker spends more on production compared to its peers that own captive mines.
The central government which has 100 per cent shareholding in the company had once sanctioned capital restructuring in the 1990s following an agitation to save it from falling into Board of Industrial and Financial Reconstruction (BIFR) trap. The company immediately needs Rs 5,000 crore towards working capital. It is struggling hard to meet establishment costs and heavy interest towards loans borrowed in the past for capacity augmentation.
“There is no clarity on the stands taken by many on the future of RINL, which has tremendous potential to make a turnaround,” former Director (Operations) of RINL K K Rao told Bizz Buzz on Friday.
VSP was set up in 1962 following ‘Visakha Ukku Andhrula Hakku’ agitation across Andhra Pradesh and Telangana which claimed the lives of 32 agitators in police firing. The steel plant was set up with a grant of Rs 4,890 crore and another Rs 4,000 crore through bank loans. The company invested Rs 16,300 crore on capacity expansion.
“The Minister retracted his statement during a chat with us may be due to pressure from the central leadership of BJP. This is really unfortunate as the powers-that-be are playing with the lives of employees, many of whom got jobs under displaced families quota after surrendering 22,000 acres for establishment of the steel plant,” lamented Visakha Steel Employees’ Congress deputy general secretary Neerukonda Ramachandra Rao.
The Minister retracted his statement during a chat with us may be due to pressure from the central leadership of BJP. This is unfortunate as the powers-that-be are playing with the lives of employees, many of whom got jobs under displaced families’ quota after surrendering 22,000 acres for the establishment of the steel plant
- Neerukonda Ramachandra Rao of Visakha Steel Employees’ Congress
