The TDP says the plant will not be privatised, but the employees and Opposition parties are not convinced.
Published Aug 25, 2025 | 3:00 PM ⚊ Updated Sep 12, 2025 | 11:33 AM
Vizag steel plant
Synopsis: Employees and trade unions allege that the Centre is quietly slicing away the public sector behemoth. They accuse the TDP-BJP alliance of complicity, despite the ruling TDP publicly vowing to protect VSP. The recent bid to outsource critical departments and contract work has fuelled suspicions that a “salami slicing” strategy is underway.
The Visakhapatnam Steel Plant (VSP) is once again at the centre of a major storm. For decades, the plant has stood tall as the pride of Telugu people, born out of a mass struggle in which 32 people laid down their lives in the 1960s.
Conceived in 1970 and becoming operational from 1991, VSP remains India’s first shore-based integrated steel plant with a capacity of 7.3 million tonnes per annum. It employs over 12,000 permanent workers and sustains thousands more indirectly. But fears of privatisation refuse to die.
Employees and trade unions allege that the Centre is quietly slicing away the public sector behemoth. They accuse the TDP-BJP alliance of complicity, despite the ruling TDP publicly vowing to protect VSP. The recent bid to outsource critical departments and contract work has fuelled suspicions that a “salami slicing” strategy is underway.
The Centre had first announced “strategic disinvestment” in 2021, citing mounting losses of ₹20,000 crore by 2024. The absence of captive mines and reliance on costly imported coking coal were flagged as reasons. Employees, however, see this as a pretext to hand over the plant to private giants.
TDP state president and Gajuwaka MLA Palla Srinivasa Rao recently rubbished claims of privatisation.
“Only contract works have been outsourced, which is routine. The plant will remain in the public sector,” he said.
He pointed out that the Centre sanctioned ₹11,440 crore and the state ₹2,600 crore—over ₹14,000 crore in all—to revive the plant. This lifeline, he argued, ensured steady supply of raw materials, power, and water.
The MLA said the plant’s three blast furnaces are now running at full steam. With a monthly wage bill of ₹240 crore, the unit can still generate ₹100–200 crore profit at optimum capacity. “Vizag Steel will never be privatised,” he said.
Also Read: Centre breathes life into ailing VSP with ₹11,500 crore package
The assurances, however, have not convinced the employees or Opposition parties. They accuse the ruling alliance of doublespeak. YSRCP leader Botcha Satyanarayana on Sunday, 24 August, announced a “massive movement” against privatisation, calling TDP’s stance “meek surrender” to the BJP.
Earlier, in June 2025, workers demanded that Prime Minister Narendra Modi give a categorical assurance against privatisation. On Saturday, 23 August, the Greater Visakhapatnam Municipal Corporation unanimously passed a resolution opposing disinvestment.
Adding to the anxiety is the ArcelorMittal/Nippon Steel (AM/NS) plant coming up in Visakhapatnam. Trade unions fear unfair competition, preferential allocation of resources, and eventual sidelining of VSP. The government maintained that both plants can coexist and drive growth. The issue is turning politically explosive.
In 2023, then Telangana Chief Minister K Chandrashekar Rao even offered to buy VSP outright through Singareni Collieries Company Ltd (SCCL) if the Centre insisted on disinvestment. His team studied feasibility but the report was never made public.
Both Jana Sena and YSRCP, then in opposition, had fought against privatisation. After TDP returned to power in 2024 in alliance with the BJP, fears resurfaced of a “gradual handover.”
Despite repeated denials from both Centre and State, union leaders and experts argue that the writing is on the wall is clear. Former bureaucrat EAS Sarma described the revival packages as “calculated moves” towards privatisation, citing management actions against protesting employees and the August 2025 outsourcing notification.
The government insisted that it wanted the VSP to function efficiency and that it is not contemplating to sell it. Yet, workers remain wary. For them, VSP is not just a plant—it is the product of blood, sweat, and sacrifice.
As the political slugfest intensified, the fate of Vizag Steel hangs in the balance. For now, it survives on government infusions and worker resilience. Whether it remains a people’s plant or slides into private hands is a question no one has yet answered with certainty.
(Edited by Majnu Babu).
