Steel minister cancels VSP visit fearing protests

Though the Minister cancelled the trip, we went ahead with our protest programme by all the unions and raised slogans against privatisation of RINL and demanded immediate restoration of normal supply of iron ore to VSP as per the long term arrangement since its establishment, - Neerukonda Ramachandra Rao, INTUC leader, tells Bizz Buzz

Feeling The Heat

♦ No reasons mentioned for the cancellation of Faggan Singh Kulaste’s trip

♦ As per the original schedule, Minister had given an appointment with the trade unions

♦ The Minister was also supposed to hold a formal review meeting with RINL executives

♦ During his last visit, the Minister courted controversy by saying that privatization was put on hold

♦ He retracted the statement hours later

Visakhapatnam: A visit by Union Minister of State (MoS) for Steel and Rural Development Faggan Singh Kulaste to the Visakhapatnam Steel Plant (VSP) on Tuesday evening was cancelled at the eleventh hour following a threat by the trade unions fighting against privatisation of Rashtriya Ispat Nigam Ltd (RINL) and call for protest with placards mentioning ‘Minister Go Back.’ Though no reasons were mentioned for the cancellation of the Minister’s trip, as per the original schedule, he had given an appointment with the trade unions and Steel Executives Association (SEA) after a visit to the steel plant and a formal review meeting with the top brass and senior executives of RINL, the corporate entity of VSP.

Kulaste courted a controversy during his last visit to the city in April when he was reported to have said that the privatisation decision was put on hold as the Centre wanted to strengthen RINL and hours later he retracted the statement denying having said anything. The Ministry of Steel later said it was a policy decision by the government to go for disinvestment of PSUs in non-strategic sector.

The Union Minister was supposed to have dinner at the Hilltop Guesthouse of VSP on Tuesday and leave for New Delhi by flight the next day morning. An agitation is going under the aegis of Visakha Ukku Parirakshana Porata Samiti since the Cabinet Committee on Economic Affairs cleared the proposal for disinvestment of RINL, its joint ventures and subsidiaries by way of 100 per cent privatisation.

RINL owns Orissa Minerals Development Company (OMDC) and Bisra Stone Lime Company Ltd (BSLC). RINL, which runs VSP with a production capacity of 7.3 million tonnes per annum, is facing a severe working capital crunch. To overcome this, it is exploring land monetisation by holding talks with NMDC and borrowing loans from Tata International.

A fresh crisis has erupted after NMDC since August stopped normal supply of iron ore from Kirandul and Bacheli blocks in Bastar district of Chattisgarh stating that production has been hit due to monsoon rains and other factors. It asked RINL to source iron ore from its mines located in Karnataka, which the trade unions say are low in quality and will entail a heavy burden on RINL towards transportation of the raw material. It is estimated to entail a burden of Rs800 to Rs1,000 per tonne towards freight cost because of long distance.

“Though the Minister cancelled the trip, we went ahead with our protest programme by all the unions and raised slogans against privatisation of RINL and demanded immediate restoration of normal supply of iron ore to VSP as per the long term arrangement since its establishment,” INTUC leader Neerukonda Ramachandra Rao told Bizz Buzz. In a letter to Union Steel Minister Jyotiraditya Scindia, Rajya Sabha MP GVL Narasimha Rao earlier said that RINL is facing a critical problem with regard to supply of iron ore from NMDC, another Central Public Sector Enterprise under the Steel Ministry. He stated that since RINL’s inception, NMDC has been supplying iron ore fines, lump and sized ore from Bailadila (Bacheli & Kirandul) mines in Chhattisgarh to RINL till a few months ago. “These are the nearest and best quality iron ore mines at a distance of 560 kms from Visakhapatnam,” he stated.

“As most of the iron ore from Bacheli & Kirandul mines is being supplied to private steel producers, NMDC has now asked RINL to receive most of its iron ore requirements from its mines in Karnataka which is more than 900 km away from Visakhapatnam resulting in an additional expenditure of around Rs800 per tonne on account of transportation,” GVL mentioned in the letter. He said RINL is now deprived of stock to run the blast furnaces though it is supposed to have buffer for a minimum 10 days of stock even to operate two blast furnaces.