Politics Intensifying against Sale of RINL VSP
RINL VSPThe Wire

Politics Intensifying against Sale of RINL VSP

Andhra Pradesh Chief Minister Mr YS Jagan Mohan Reddy has written a letter to Prime Minister Mr Narendra Modi requesting him to reconsider the

Andhra Pradesh Chief Minister Mr YS Jagan Mohan Reddy has written a letter to Prime Minister Mr Narendra Modi requesting him to reconsider the privatisation move and explore other opportunities to put it back on track. He suggested that the Central government should continue operations for a further period of two years to achieve a turnaround, provide captive iron ore mines to reduce input costs and to restructure both long and short-term loans in order to save the historic plant.

Andhra BJP President Mr Somu Veerraju met Union Petroleum Minister Mr Dharmendra Pradhan along with other leaders of the party and submitted a memorandum seeking reconsideration of privatising the Vizag steel plant as it pertains to the sentiments of the state. Mr Veerraju told "People of Andhra Pradesh are opposing the privatisation of the steel plant. We have informed that their sentiments must be protected. We have requested the protection of steel plant employees' welfare.”

Andhra Pradesh Chambers of Commerce and Industry Federation in a letter to the Union finance minister Ms Nirmala Sitharaman last week wrote that “Recent decision by the Cabinet Committee for Economic Affairs to grant in-principle approval for 100% divestment of Centre's stake in Rashtriya Ispat Nigam Ltd popularly known as Visakha Steel Plant is disheartening to the people of Andhra Pradesh. RINL is considered a crown jewel among the PSUs in the state and the people are emotionally attached to it. VSP directly employs around 20,000 people besides providing indirect employment to thousands of others. It is the first shore-based integrated steel plant in the country that is well-known for its quality products and caters to the needs of diverse industrial sectors. The absence of a captive mine for the RINL results in high input costs as the company buys iron ore at market rates. Central government should allot a captive mine to RINL similar to other SAIL plants to reduce cost of production and offer its products at competitive rates.”

India’s Union Cabinet has approved privatisation of Vizag based state owned public sector Rashtriya Ispat Nigam Ltd, in which the government currently holds 100% stake this month. A government official said “While approving the strategic disinvestment of RINL a few days ago, the Cabinet delegated powers to the Alternative Mechanism headed by the Finance Minister to decide whether the subsidiaries of RINL will be part of the transaction, depending on the feedback from potential investors.”

RINL Subsidiaries

The Orissa Minerals Development Company Ltd

The Bisra Stone Lime Company Ltd

RINL JVs

RINMOIL Ferro Alloys Pvt Ltd

RINL Powergrid TLT Pvt Ltd

History of RINL - The decision to establish a Steel Plant at Visakhapatnam was announced in the Parliament in 1970 by the then Prime Minister Late Ms Indira Gandhi. The foundation stone for this massive project was laid in 1971. The Detailed Project Report was prepared in 1977. However, it was only in 1979 with the Government of erstwhile Soviet Union offering techno-economic cooperation, the cabinet approved the proposal for setting up of an integrated Steel Plant at Visakhapatnam. Following this, the comprehensive Revised Detailed Project Report was prepared adopting latest technologies available. However, the journey of Vizag Steel has not been very smooth. 22 long years between conception and commissioning resulted in an increase of project cost to over INR 8,500 crores. Visakhapatnam Steel Plant was initially set up with a rated capacity of 3.4 million tonnes of Hot Metal, 3.0 million tonnes of Liquid Steel and 2.7 million tonnes of Saleable Steel. RINL has completed the first phase of expansion to increase Hot Metal capacity to 6.5 million tonnes, Liquid Steel to 6.3 million tonnes & Saleable Steel to 5.7 million tonnes. RINL has started second phase of expansion to increase Liquid Steel capacity to 7.3 million tonnes by modernization & up gradation of existing iron & steel making units

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