- In a late evening letter to Prime Minister Modi, Jagan said the RINL, the corporate entity of Visakhapatnam Steel Plant, was the largest public sector industrial unit in Andhra Pradesh creating employment for nearly 20,000 people directly and for many others indirectly.
Andhra Pradesh chief minister YS Jagan Mohan Reddy on Saturday appealed to the Centre to reconsider its proposal to privatise the Rasthriya Ispat Nigam Limited through 100 per cent strategic disinvestment of the shareholding of Government of India.
Jagan’s letter comes in the backdrop of massive protests from the employees of the RINL and political parties. Senior Telugu Desam Party legislator from Visakhapatnam (North) Ganta Srinivasa Rao resigned from his assembly membership in the afternoon in protest against the proposed privatisation of the steel plant.
In a late evening letter to Prime Minister Narendra Modi, Jagan said the decision to privatise the RINL has created a lot of concern among the people of the state. He said the RINL, the corporate entity of Visakhapatnam Steel Plant, was the largest public sector industrial unit in the state creating employment opportunities for nearly 20000 people directly and many other indirect employment opportunities.
He said the steel plant was established after a decade-long agitation in which 32 people laid down their lives. The plant had performed well between 2002 to 2015 earning profits, making a turnaround after it was referred to the BIFR as a sick company. “The company has around 19700 acres of land currently and the valuation of these lands alone could exceed one lakh crore rupees due to the location of the plant in the urban area,” he pointed out.
The chief minister further said the RINL with a production capacity of 7.3 million tonnes, had taken up plant modernisation and capacity expansion recently which led to the plant borrowing from banks to take up the expansion. Due to a slump in the steel market, the company had been making losses since 2015 and was finding it difficult to service the debt.
One of the major structural issues that also led to high cost of production is the absence of a captive mine thereby affecting the profitability. The plant will again become a profitable venture given some support from the Centre such as allotting captive iron ore mines to bring down the input costs, swapping high-cost debt with low-cost debt, and converting debt into equity through equity conversion, Jagan said.
“I assure you that the state government will closely work with the Centre in turning around the company and together, we can revive the plant for unlocking greater value to the society,” he requested the Prime Minister.
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