AP Chambers decries Visakhapatnam Steel Plant privatisation move

Vijayawada: Andhra Pradesh Chambers of Commerce and Industry Federation in a letter to the Union finance minister Nirmala Sitharaman stated here on Friday that the recent decision by the Cabinet Committee for Economic Affairs to grant in-principle approval for 100 per cent divestment of Centre's stake in Rashtriya Ispat Nigam Ltd (RINL) popularly known as Visakha Steel Plant is disheartening to the people of Andhra Pradesh.

AP Chambers general secretary Potluri Bhaskar Rao in a statement on Friday said the RINL (VSP) was established in Visakhapatnam after years of agitation and sacrifice by the people of the state. Thirty-two people lost their lives during the fight for the steel plant in Visakhapatnam. The RINL is considered a crown jewel among the PSUs in the state and the people are emotionally attached to it, it added.

He said the VSP is the largest Navaratna PSU in the state that directly employs around 20,000 people besides providing indirect employment to thousands of others. It is the first shore-based integrated steel plant in the country that is well-known for its quality products and caters to the needs of diverse industrial sectors.

Bhaskar Rao noted that the company has around 19,700 acre land in prime urban area with an estimated value of more than Rs 1 lakh crore. "The RINL posted profits for almost 12 years until 2014. On account of the global decline in the demand for steel, the company has been posting losses since 2014-15. The borrowing from banks is on account of the expansion and plant modernisation plans that the company took up recently. Because of these factors the company is finding it difficult to repay its loans. The absence of a captive mine for the RINL results in high input costs as the company buys iron ore at market rates," the statement said.

The chambers requested the Central government to allot a captive mine to RINL similar to other SAIL plants to reduce cost of production and offer its products at competitive rates.

AP Chambers welcomes the significant announcements in Union Budget 2021-22. The statement said the proposed capital expenditure in the areas of healthcare, education and infrastructure, and labour reforms for migrant workers are a step in the right direction which can generate new employment opportunities and increase disposable income that can in turn increase consumer spending.