Min: ₹11K-cr package to revive Vizag steel plant
Making an official statement, Union minister for railways Ashwini Vaishnaw said the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved this package during a meeting held in New Delhi on Thursday.
The central government on Friday announced a financial package of ₹11,440 crore to Visakhapatnam-based public sector undertaking, Rashtriya Ispat Nigam Limited (RINL), better known as Visakhapatnam Steel Plant (VSP) to bail out the company from a huge financial crisis.
Making an official statement, Union minister for railways Ashwini Vaishnaw said the Cabinet Committee on Economic Affairs (CCEA), chaired by Prime Minister Narendra Modi, approved this package during a meeting held in New Delhi on Thursday.
The Andhra Pradesh state cabinet chaired by chief minister N Chandrababu Naidu thanked the PM for granting the huge financial package to the Visakhapatnam Steel Plant, which has been in deep financial crisis for the last few years.
“Today marks a historic moment etched in steel. It is an emotional and proud moment for people of Andhra Pradesh, as the Union Government, in response to GoAP’s consistent efforts since the formation of NDA Government, has approved financial support of Rs. 11,440 crore to revive the Vizag Steel Plant. I extend my heartfelt gratitude to the Hon’ble Prime Minister, Shri @narendramodi Ji for his unwavering support to the Steel Plant, which I assure, will contribute to PM’s vision of nation building as part of Viksit Bharat – Viksit Andhra,” the chief minister tweeted on X.
In his statement, Vaishnaw said the RINL has a very special position in the entire steel industry. Located in the coastal Andhra Pradesh city of Visakhapatnam, this is a very important steel company in the overall steel sector of the country.
“With this revival package, many of the historical legacy problems that RINL used to face will be resolved. Simultaneously, a lot of effort is going to be put in securing the raw material for RINL and the modernisation of the plant,” he said.
The overall revival package of ₹11,440 crore include fresh equity infusion of ₹10,300 crore and the conversion of working capital loan into preferred share capital of ₹1,140 crore.
“With this, all the employees of RINL as well as all the people connected with the economic activities of RINL will be immensely benefited and Andhra Pradesh will have a major steel plant revived in the coming days. Very soon RINL will start functioning with two blast furnaces and by August, it is planned to restart all the three blast furnaces,” Vaishnaw said.
Meanwhile, Naidu also thanked Union finance minister Nirmala Sitaraman and Union steel minister HD Kumaraswamy for their constant support and positive response. He said the Vizag Steel Plant is more than just a factory – it stands as a monument to the struggles and spirit of the people of Andhra Pradesh, holding a special place in the hearts of all, especially the people of Vizag.
“This was not merely an election promise; it was a deeply personal commitment we were determined to honour. Good days ahead for Andhra Pradesh! Visakha Ukku, Andhrula Hakku! #GoodDaysForVSP #RINL,” the chief minister tweeted.
A state government official familiar with the matter said the Visakhapatnam Steel Plant, with an annual production capacity of 7.3 million tonnes, incurred losses of ₹4,848.86 crore in 2023-24 and ₹2,858.74 crore in 2022-23. The main reason for these losses is the increasing debt incurred for working capital, he said.
The state government, besides the labour unions of the steel plant have been asking for the release of ₹18,000 crore to stabilise the plant. “Subsequently, under the Emergency Advance Fund of the Ministry of Steel, ₹500 crore was released for GST payments, and another ₹1,150 crore was provided for clearing bank debts related to raw materials,” the official said.
