Vizag Steel Plant staff preps for agitation against move to privatise company
- Despite having an installed capacity of 21 million tonnes per year, the Visakhapatnam Steel Plant has presently been operating with a production capacity of only 7.3 million tonnes.
Thousands of employees belonging to the Rasthtriya Ispat Nigam Limited (RINL), one of the largest state-run steel plants in Andhra Pradesh’s Visakhapatnam, will take out a huge rally in the port city on Friday in protest against the NDA government’s decision of privatisation of the mega steel plant.
A tweet by secretary of Department of Investment and Public Asset Management (DIPAM) Tuhin Kanta Pandey on Wednesday stating that the Cabinet Committee of Economic Affairs (CCEA) has cleared the privatisation of RINL, popularly known as Visakhapatnam Steel Plant or Vizag Steel, has triggered an uproar among the employees on Thursday.
“Whatever we have been fearing all these days has finally happened. We have been left with no option but to fight it out till the Centre withdraws the proposal,” D Adinarayana, a trade union leader of the steel plant said.
Pandey tweeted that the Cabinet Committee on Economic Affairs (CCEA) on January 27 had given in principle approval for 100% strategic disinvestment of the Government of India shareholding in RINL along with management control by way of privatization.
The employees have formed an umbrella organisation in the name of joint action committee (JAC) comprising the Centre for Indian Trade Unions (CITU), All India Trade Union Congress (AITUC), Indian National Trade Union Congress (INTUC) and have decided to step up the agitation in protest against the privatisation move.
“We shall begin with a massive rally in Visakhapatnam with thousands of employees on Friday. Later, we shall tour all parts of the state to highlight our cause,” Adinarayana said.
Though having an installed capacity of 21 million tonnes per year, the Visakhapatnam Steel Plant has presently been operating with a production capacity of only 7.3 million tonnes.
“The basic reason for this underperformance of the plant is lack of raw material. Unlike Steel Authority of India Limited (SAIL), Tata Steel, Jindal Steel and other such plants, the VSP does not have its captive iron ore mine. We have been depending on the supplies from Bailadila mines being run by the National Mineral Development Corporation and importing coking coal from Austria,” another senior employee VM Naidu said.
He said because the other steel plants have their own captive mines, they are able to get the iron ore at a cost of ₹1500 per tonne, whereas the RINL was spending ₹7,000 per tonne. “We require 20,000 tonnes every day and that is resulting in huge losses to the company,” Naidu said.
Established in 1988 after massive agitations, the RINL has been witnessing several ups and downs in the last two decades. “In 2003-04, the company was referred to the Board for Industrial Finance and Reconstruction (BIFR) for winding up due to losses, but we agitated then, too. We assured the government that we shall work hard to make the company turnaround and within two years, we proved it,” J Ayodhya Ramu, president of CITU, Vizag Steel, said.
The RINL has been incurring losses over a period of time, but occasionally, it has also been making profits. In 2017-18, it incurred net losses worth ₹1,321 crore, but the next year, it bounced back with a net profit of ₹96 crore. “However, due to a slump in the market and later the Covid-19 pandemic, the production has come down resulting in losses in the next two years,” he said.
“Even now, if the Central government allocates captive iron ore mines to the steel plant, we challenge that we can bring the plant back on profits and also make it run to full capacity,” Ramu said.
According to Naidu, there are around 17,000 permanent employees in the RINL, besides another 16,000 contractual workers. Another 40,000 people are depending on the steel plant indirectly in the allied activities. “All their lives will be in jeopardy if the government privatises the steel plant,” he said.
The employees’ unions are apprehensive that the Centre is planning to dispose of the steel plant along with lands and machinery to South Korean giant POSCO. “In fact, last year itself, the Union steel ministry signed an agreement with POSCO to set up a joint venture with RINL in the available land. But we strongly resisted. Now, they are coming through the backdoor method,” Ramu alleged.
Vizag Steel has around 22,000 acres of land, acquired by the state government for the steel plant. “At the present market value, each acre costs around ₹5 crore. So, the land value itself is more than ₹one lakh crore. The Centre is likely to sell this prime property to private parties for a song, which we will strongly resist,” the trade union leader said.