Andhra assembly to adopt resolution against privatisation of Vizag steel plant
- Andhra Pradesh chief minister Y S Jagan Mohan Reddy said he was confident that the Centre would change its stand on privatising the Rashtriya Ispat Nigam Limited.
Andhra Pradesh chief minister Y S Jagan Mohan Reddy on Wednesday announced that the state assembly would adopt a resolution soon requesting the Centre to drop its proposal to privatise the prestigious Rashtriya Ispat Nigam Limited (RINL), better known as Visakhapatnam Steel Plant.
“We shall make all out efforts to ensure that the Vizag steel plant, which is a sentiment of the people of Andhra Pradesh, will not be sold out to private parties under any circumstances. I am confident that the Centre will change its stand in this regard,” Jagan said.
The chief minister held an hour-long meeting with the representatives of various trade unions belonging to Visakhapatnam Steel Plant in the wake of intensifying agitation of the workers against privatisation of the plant.
He said he had suggested to the Centre to restore the leases of the RINL in the iron ore mines in Odisha as a strategy to prevent proposed privatisation of the steel plant.
The chief minister said the RINL was suffering losses due to lack of captive mines and it was forced to spend an additional amount of ₹4,000 per tonne of iron ore. “I wrote a letter to Prime Minister Narendra Modi, requesting that a captive iron ore mine in the neighbouring Odisha state be allocated to the RINL,” he said.
He pointed out that the RINL had earlier been given 51 per cent of share in five iron ore mines Odisha, the remaining 49 per cent stake belonging to the Central government, LIC and Odisha Mineral Development Corporation.
“These mines have high quality iron ore to the extent of 200 million tonne, which is enough for the RINL for the coming several years. However, the lease agreement of these mines had lapsed long ago. If this agreement is revived and the stakes of RINL is restored, the steel plant will be back into profits,” Jagan said.
He further said the RINL had an accumulated debt of ₹22,000 crore, including long-term loans worth ₹12,000 crore and another ₹11,000 crore loans obtained from banks towards working capital. Some banks had given loans at a high interest rate of 14 per cent.
The chief minister said he had suggested conversion of high-interest long-term loans into equity so as to reduce the interest burden. “It will immediately help the RINL overcome the burden of repayment of around ₹3,000 crore. This will bring the company into profits. The RINL can come out with a public issue and get the shares listed in the stock exchange, so that the banks could use the exit options whenever they want,” he said.
The chief minister also suggested another solution to bail out the RINL from losses. “The steel plant has around 20,000 acres of land, of which 7,000 acres are still not in use. The state government will give approval to the steel plant for the land use conversion, since it is under the purview of the state. The RINL management can auction these vacant lands and plough the money that is accrued back into the steel plant. It will increase the cash reserves of the steel plant,” he said.
The chief minister requested that the Bharatiya Janata Party leaders, too, support these suggestions and take them up with the Centre to drop the privatisation plan. “We shall also make our own efforts in this direction,” he said.
Jagan, however, appealed to the workers of the steel plant not to strike work but operate t with more efficiency. “Under any circumstances, we shall not create an impression that the plant was running in losses due to lack of production,” he said.