VSP workers' union leaders noted that they could not believe Kulaste's statements unless the CCEA made an announcement to this effect.
The Visakhapatnam Steel Plant. (Supplied)
In the face of widespread and strong opposition, the Centre appears to have decided to go slow on privatising the Navaratna steelmaker Visakhapatnam Steel Plant (VSP) in Andhra Pradesh.
Union Minister of State for Steel Faggan Singh Kulaste, who was in Visakhapatnam on Thursday, 13 April, said that the Central government would focus on strengthening the VSP for the moment rather than privatising it.
However, he refused to say that the Centre had rolled back its decision to privatise the steel plant.
The VSP workers’ union was sceptical about the minister’s statement, even as the BRS — which is in power in Telangana and had endeavoured to intervene in the VSP’s privatisation — tried to take credit for it, which led to a fresh bout of heated exchanges between the ruling parties of both the Telugu-speaking states.
“As of date, we don’t have any plan (selling VSP) like that. In the coming days, we will do better, including sorting out some problems with mining. Efforts will be made to bring the idle units into operation, besides strengthening the plant,” Kulaste told reporters in Vizag on Thursday morning on the sidelines of handing over appointment letters under the nationwide employment programme Rozgar Mela.
Later in the evening, in a meeting with workers’ unions, the MoS said that only the Union Cabinet could take a decision on stopping the privatisation, and that it was out of his purview.
VSP workers’ union leaders noted that they could not rely on Kulaste’s statements unless an authoritative announcement was made by the Cabinet Committee on Economic Affairs (CCEA) to this effect.
“We do not believe this announcement completely. It was the CCEA that decided to sell VSP, and it should announce that it is not selling it. We have been protesting the privatisation plan for the past 800 days,” said VSP workers’ recognised union leader D Adinarayana.
KM Srinivas, vice-president of the VSP Employees’ Union, which is affiliated with the CPI(M)’s CITU, told South First that they would not believe the Centre unless the committees of transaction, legal advisors, and valuation were cancelled.
The leader demanded that these plans be aborted immediately. Only then could they believe Kulaste’s announcement, he said.
The BRS on Thursday said the credit for the Central government going on the backfoot in privatising VSP went to Telangana Chief Minister and party chief K Chandrashekar Rao.
IT and Industries Minister KT Rama Rao, who is KCR’s son, said the Centre now knows how powerful the BRS chief’s punch will be.
He said it was KCR alone who had raised his voice against the attempts to privatise the steel plant.
The minister made the comments while speaking at a function organised by the Telangana Industries Department on the eve of the 125th birth anniversary of BR Ambedkar.
Telangana Finance Minister T Harish Rao, speaking at an Athmeeya Sammelan at Marpelli in the Vikarabad district, said it was he and KCR who spoke against the attempts to privatise VSP.
“We said that VSP was being sold at a fourth of its value, unmindful of the fact it would endanger the livelihood of 27,000 employees,” he claimed.
Harish Rao also said the chief minister had declared that the BRS would fight tooth and nail against the privatisation of VSP.
The Centre had climbed down from its stance of privatisation only because the BRS fought against its attempts, he said.
He also took potshots at the YSRCP government and the Opposition TDP in Andhra Pradesh for keeping quiet when the Centre was going ahead with its plans to privatise VSP.
It may be noted that the BRS government’s protest against the privatisation of VSP — also known as the Rashtriya Ispat Nigam Ltd (RINL) — and its move to “secure” the entity generated much heat in Andhra Pradesh.
The Telangana government-controlled Singareni Collieries Company Limited (SCCL) evinced interest in participating in the Expression of Interest (EoI) issued by RINL.
A five-member delegation from SCCL, comprising three directors and two general managers, also visited VSP to study the feasibility of participating in the EoI.
The SCCL directors on Tuesday and Wednesday held talks with the top officials of RINL.
Meanwhile, former Andhra Pradesh minister Perni Nani said that it was Chief Minister YS Jagan Mohan Reddy who had initially written to the Centre to allocate captive mines to VSP and opposed the strategic disinvestment of the steel plant, besides suggesting several alternatives to bail it out the lossmaking enterprise.
Taking a dig at the remarks made by Harish Rao, he said that the latter was resorting to mudslinging at the YSRCP government for political mileage.
He wanted to know why, if the Telangana government was really committed to the welfare of the people of Andhra Pradesh, it was opposing the Rayalaseema Lift Irrigation Scheme of Andhra Pradesh, which lifts water for the Pothireddypadu canal, and had illegally constructed the Dindi and Palamuru Rangareddy irrigation projects.
He also asked why KCR could not secure such a statement from the Centre on the privatisation of SCCL.
The VSP is the only shore-based integrated steel plant in the country, with two major ports within 25 km of it.
The plant expanded its capacity from three million tonnes to 7.3 million tonnes as per the National Steel Policy, and is the single-largest public sector unit (PSU) in the steel industry.
However, VSP could not achieve its stated capacity due to a financial crisis.
Its lack of captive iron and coal mines spiralled the production cost to ₹6,000-₹7,000 per tonne, higher than any other steel plant in India.
While the CCEA in January last year gave in-principle approval for 100 percent strategic disinvestment of the Central government’s shareholding in RINL, along with management control, by way of privatisation, the state-run plant recently invited from private companies and steel manufacturers to provide working capital, and raw materials, and to purchase its products.
It is learnt that the RINL is looking at the infusion of working capital in the range of ₹3,500-5,000 crore through the EoI.
Currently, only two of the three blast furnaces at VSP are in operation. The third one was shut down in January 2022 due to a lack of coking coal and working capital.
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