Hyderabad : Privatisation not now

Hyderabad : It was double-tongued talk on the part of Union Minister of State for Steel Faggan Singh Kulaste on Thursday.

Talking to the media after participating Rozgar Mela, the minister said that there was no move to privatise VSP for present. But during his meeting with trade union leaders, he said that there was nothing that he could do as it was the decision of the Cabinet Committee on Economic Affairs.

Unhappy with this change of stand by the Union minister, the union leaders said that there were many options to revive the VSP and bring it into profits by October 2023. It just requires Rs 6,000 crore. The main problem it was facing was denial of fresh loans by the banks, financial institutions and even LIC.

Firstly, a cap is imposed on the maximum loans that the VSP can raise from the government side. On the other, the banks refused loans to the VSP, citing a loss of its networth.

Last year, the VSP managed to get about Rs 1,500 crore from the SBI and another Rs 500 crore from the IDBI to keep the plant afloat. But, for the last 14-months the blast furnace is not operational. Though it has a capacity of 7.5 million metric tons, it could not produce even 6.5 MMT due to non-operation of furnaces.

Against this backdrop that the VSP had invited Expressions of Interest (EOI) from prospective bidders and offered to give semi steel from the VSP. "Five to seven parties, including JSPL, JSW and others, had shown interest. The unions have also written to the Steel ministry to direct the SAIL and National Mineral Development Corporation (NMDC) to take part in the bidding but there has been no response from them. They said that when the Union Minister said there was no move to privatise the VSP, they expected that he would announce participation of SAIL and NMDC in the bidding.

Currently, the VSP is taking iron ore from the NMDC as the former has no captive mines. They said the crisis can be effectively handled if the Centre intends.

They said the VSP has a Wheel Axle Factory in Rae Bareli in Uttar Pradesh valued around Rs 2,000 crore. Similarly, it has some lands in HB Colony in Sitammadhara which was purchased for the quarters of the VSP employees. Selling them would bring another Rs 2,000 crore. The NMDC wanted to set up a pellet plant here. If agreed it can help mobilise another Rs 650 crore.

The NMDC evinced interest to take it on a lease basis. Such measures can bring the VSP into profits once again, they add.