Reacting to the decision of the cabinet committee on economic affairs to privatise RINL, the corporate entity of Vizag steel plant (VSP), Andhra Pradesh’s chief minister, Mr Jagan Mohan Reddy has written to the PM asking him to reconsider the decision.
In a four page letter the CM highlighted the struggle of the people of Andhra Pradesh in getting a steel plant in Visakhapatnam.
‘The steel plant stands as a testimony to the will of the Telugu people and is continued as an icon of Telugu Achievement in our collective psyche till date’ said the CM in his letter.
He recalled the sacrifice of the people in getting the steel plant established here “The people of my state rallied for the Visakhapatnam steel plant in which 32 people have laid down their lives. On 17th April 1970 the then prime minister of India announced the government’s decision to establish a steel plant at Visakhapatnam culminating the decade-long public agitation ‘Visakha Ukku-Andhrula Hakku”.
“I can emphatically say that the plant will again become a profitable venture given some support from GoI instead of taking the disinvestment route.”
—Mr Jagan Mohan Reddy,
Chief Minister, AP
The CM then went on to suggest measures to revive RINL by allocating captive iron ore mines and also by financial restructuring which he stated would help in alleviating RINL’s financial burden.
Owing to the high cost of production due to the absence of captive iron ore mines the CM asked the Government of India to allocate captive iron ore mines to RINL.
‘Orissa is blessed with iron ore and captive mines in Orissa state will go a long way in reviving the plant . Even SAIL has its own captive mines with reserves of iron ore sufficient for 200 years’ said the CM in his letter to the PM.
He also called for restructuring of RINL’s loans by stating that the Rs. 22,000 crore debt which is being serviced at 14% can be converted into equity by the banks in order to remove the interest burden and by listing RINL on the stock exchange.
“Conversion of RINL’s loans into equity, listing RINL on the stock exchange and allocating captive iron ore mines can turnaround RINL.”
–Mr Jagan Mohan Reddy,
Chief Minister, AP
RINL is the country’s first shore based integrated steel plant and produces long steel products used in the construction sector and also in the manufacturing and automotive sector.
It directly employs about 18000 people while indirect employment is said to be another 17000 people.
The steel plant currently has a capacity of 7.3 million tonnes and has already undertaken expansion and modernisation work of the plant.
Mr Jagan concluded the letter by reiterating the demand to reconsider the disinvestment decision and assured the PM that the state government would work with the central government in putting the plant back on track.
‘GoAP is ready to work with the Ministry of Steel to protect the jewel of Andhra Pradesh’ said the CM.