Cong questions govt decision to shut down Visvesvaraya steel plant

Congress on Monday questioned the Bharatiya Janata Party (BJP)-led state government over the decision to close down Visvesvaraya Iron and Steel Plant (VISP) in Bhadravati in Karnataka

Congress on Monday questioned the Bharatiya Janata Party (BJP)-led state government over the decision to close down Visvesvaraya Iron and Steel Plant (VISP) in Bhadravati in Karnataka.

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Congress general secretary in charge of communications, Jairam Ramesh, said that even though private companies continue to mine iron ore in the state, the Steel Authority of India Limited (SAIL) is shutting down the mines.

The minister of steel, Jyotiraditya M Scindia, on Monday, in a reply to a question said that the process of shutting down VISP was initiated due to high costs, low volume of production, and the lack of an operational captive iron ore mine in Karnataka.

The minister listed four reasons -- high cost and low volume of production due to obsolete technology, high cost of raw material, highly competitive alloy steel market, and lack of an operational captive iron ore mine in Karnataka - as the reason for the closure.

Responding to the closure, Ramesh tweeted: “Today in RS, Govt admitted that Visveswaraya Iron & Steel Plant of SAIL at Bhadravati in Karnataka is being closed. One reason given is the plant doesn’t have a captive iron ore source in Karnataka. Amazingly, private steel companies have mines in the state but not SAIL!.”

“This is despite Bhadravati being less than 250 km away from Ballari. A mining lease was allocated in October 2011, but the Modi Sarkar did nothing,” he added.

In October 2016, the Union government approved the strategic disinvestment of VISP in principle. However, the inability of the shortlisted bidders to participate in the transaction necessitated the cancellation of the Expression of Interest for disinvestment. Later, the department of investment and public asset management issued an office memorandum on October 14, 2022, to begin closing the VISP.

The development comes days after chief minister Basavaraj Bommai on Wednesday assured a delegation of VISP employees that his government would make efforts to stop the closure of the plant in Bhadravati.

The chief minister told the delegation: “The Centre had initiated the closure process under the disinvestment scheme. The iron ore of Karnataka is in demand. Efforts will be made to revive the plant.”

On the same day, KPCC president DK Shivakumar met VISP employees in Bhadravati and assured them that Congress would come to power after the elections and would ensure the plant functioned.