Steel Minister's remarks on RINL JV fuels speculation
Many wonder as to why the Minister stated in Parliament in response to a query by YSRCP MP V Vijayasai Reddy on Wednesday that POSCO wished to have at least 50 per cent shareholding in the proposed joint venture
image for illustrative purpose
Recently, CCEA has given nod for the privatisation of RINL
Visakhapatnam: The remarks made by Union Steel Minister Dharmendra Pradhan that South Korean multinational POSCO is keen on entering into a joint venture with Rashtriya Ispat Nigam Limited (RINL), close on the heels of the Cabinet Committee on Economic Affairs approval for 100 per cent strategic sale of the navratna company, has fuelled speculation in various circles on its implications.
Many wonder as to why the Minister stated in Parliament in response to a query by YSRCP MP V. Vijayasai Reddy on Wednesday that the POSCO wished to have at least 50 per cent shareholding in the proposed joint venture while the shareholding of RINL would be worked out on the basis of valuation of its land contribution for establishing a Greenfield steel plant on the premises near the Visakhapatnam Steel Plant.
Presently, a Joint Working Group is examining the proposal. Officials from POSCO have visited the steel plant four times since October 22, 2018 on an initiative taken by the Prime Minister's Office.
"The project has been mired in controversies since its conception. We strongly suspect after the decision for strategic sale has sparked off spontaneous Statewide protests, there may be a conspiracy by the NDA Government to hand over the entire RINL and its land in Visakhapatnam on a golden platter to POSCO," CITU president Ch Narsinga Rao told Bizz Buzz on Thursday.
Former Chairman-cum-Managing Director of RINL Y Siva Sagar Rao feels that it is a good decision if the joint venture materialises. He said the decision would not only benefit RINL but also Visakhapatnam city due to capacity augmentation and employment creation by the shore-based greenfield steel plant. The joint venture is proposed in an area of 3,000 acres at an estimated cost of Rs 30,000 crore to meet the demand for special grade steel by the automobile industry. The employees' unions have been opposing the POSCO joint venture from the beginning saying it would be a ploy for privatisation. A non-binding MoU was signed between RINL and POSCO in October, 2019.
Katam SS Chandra Rao, joint secretary, Steel Executives' Federation of India, said many opinions were arising on the issue relating to the JV. He said till date no one is aware about what is in the JV proposal and the benefits it fetch to RINL.
He also recalled the bitter experience with regard to handing over land through the State Government for construction of a port at Gangavaram under PPP mode in which RINL was promised to be made a joint venture partner. Subsequently the project proponent refused to construct a conveyor, he regretted.
