RINL issue: Jagan seeks time with PM to discuss; bats for captive mines
FM told Lok Sabha on Monday that RINL's privatisation inevitable
image for illustrative purpose
Visakhapatnam: TENSION broke out in Gajuwaka, Malkapuram, Kurmannapalem and other industrial areas of Visakhapatnam with agitated employees and their supporters disrupting traffic with road blockades in protest against Union Finance Minister Nirmala Sitharaman's statement that the Centre was firm on selling its 100 per cent stake in Rashtriya Ispat Nigam Limited (RINL) and the State had nothing to do with the decision.
While the Visakha Ukku Parirakshana Porata Samiti formed by various unions has announced its resolve to take aggressive posture against the Centre's stand, Chief Minister YS Jagan Mohan Reddy on Tuesday dashed off a DO letter, the second in a span of a month, to Prime Minister Modi seeking an early appointment to discuss various options to prevent disinvestment of RINL, the corporate entity of Visakhapatnam Steel Plant.
The Chief Minister said the plant could achieve a turnaround if the Centre allots captive iron ore mines to bring down input costs, facilitates swapping high debt with low cost debt, converting debt into equity through conversion and monetisation of vacant land.
RINL at present has 7.3 million tonne capacity. It has completed the modernisation and expansion to increase capacity from 3 million tonne with a total investment of Rs 16,300 crore. The FM in her statement put RINL's gross block of property, plant, equipment and intangible assets as on December 31, 2020 at Rs 32,022 crore and outstanding debts at Rs 21,236 crore. The Chief Minister in the letter stated that the FM's reply to go ahead with selling 100 per cent Government of India equity in RINL and its subsidiaries/joint ventures was unfortunate.
He said "I would like to bring to your notice once again the importance of putting RINL back on track and various options available to revive the plant and its sustainability in future.
He said the Navratna company is the largest public sector industrial unit in the State providing employment to 20,000 and indirect opportunity to many others. The long products made by the country's first shore-based steel plant caters to the requirements of construction, manufacturing and automobile sectors.
He said denial of captive mines was one of the major handicap for the steel plant.
Reddy recalled how the steel plant was conceded on April 17, 1970 by the Centre after spearheading of 'Visakha Ukku Andhrula Hakku' agitation which claimed lives of 32 protesters in police firing.
The Chief Minister said the plant had good performance record during 2002-2015, earning profits with positive net worth. The plant has pragmatically turned around in 2002 after being reported to BIFR as a sick unit. The company has around 19,700 acres of land currently and the valuation of these lands alone could exceed Rs.1 lakh crore due to location of the plant in urban areas and rapidly expanding urban sprawl, he said. The Chief Minister said due to unfavourable steel cycle globally the company was making losses since 2014-15 and was finding it difficult to service the debt. "One of the major structural issues that also leads to high cost of production is the absence of captive mines thereby affecting the profitability," he pointed out.
RINL unions intensify stir
The RINL unions stepped up their agitation by blocking traffic near Kurmannapalem gate and Gajuwaka near the highway. "This has caused dislocation in our functioning as employees could not reach the workplace on time," a senior executive of an IT company. RINL recognised union president J Ayodhyaram described FM's statement as an attempt to bulldoze public sentiments throughout AP and Telangana against privatisation of the steel plant.
In an interesting development, Bharatiya Mazdoor Sangh, part of Sangh Parivar has announced its stiff opposition to FM's statement RINL privatisation.
"The decision is highly condemnable. We don't support privatisation of RINL. We will take an active role in the agitation against it. We have also become part of JAC of trade unions taking up agitation jointly," BMS national vice-president M Jagadeeswara Rao told Bizz Buzz. Dega Satyanarayana, former president Steel Executives' Association, said the Centre cannot privatise RINL without obtaining consent from the State Government. Former Minister and TDP leader Ganta Srinivasa Rao, who resigned from Assembly membership, strongly criticised FM's statement on RINL disinvestment.
