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With a single blast furnace left, RINL to become weaker
- Of the 3 blast furnaces in the plant, one was closed three months back due to shortage of raw materials
- The second blast furnace was also closed on Thursday for the same reason
- Besides, coal brought via ships from other countries is stuck in Gangavaram and Visakhapatnam ports as the company has reportedly failed to clear shipment charges
Visakhapatnam: After the formation of the coalition government in the state, expectations from the people and employees soared as they thought that it would help ensure withdrawal of privatisation of Visakhapatnam steel plant.
However, the present scenario does not indicate any such positive development as another blast furnace has been shut down in the plant.
There are three blast furnaces (BFs) in the plant. But due to non-availability of raw material, operations at BF-1 came to a grinding halt three months back. The production was carried out in BF-2 and BF-3.
Even earlier, BF-3 was closed for close to a couple of months before resuming its operation. However, production at the blast furnace-3 came to a stop on Thursday evening for mainly scarcity of raw materials, despite the production reaching not more than 70 percent.
While the capacity of both the furnaces (BF2 and BF3) was more than 14,000 tonnes, the production, however, could not cross even 10,000 tonnes for the past couple of months.
The coal brought via ships from other countries is stuck in Gangavaram Port and Visakhapatnam Port. Meanwhile, sources said that the RINL failed to meet shipment charges.
With the raw material stuck in the ports due the court case following the non-payment of shipping charges to the shipping agents.
Despite efforts taken to procure material from other sources, there was not enough coal to run two blast furnaces to its full capacity.
The management has taken precautionary measures as there is a possibility of accidents occurring in the coke oven batteries if they are run partially.
If the coke oven batteries are damaged, thousands of crores of rupees are required to repair them. Due to this, the management decided to temporarily shut down the BF-3.
Currently, one BF-2 is in operation. With least production in the plant, the management will not be able to pay salaries to the plant employees and there might not be sufficient funds to purchase raw materials.
If the VSP sells two lakh tonnes of steel per month producing from a single BF, it will not earn more than Rs.1,000 crore.
The biggest challenge now is how will the plant run with that meagre amount.
Representative of Visakha Ukku Parirakshna Porata Committee Varasala Srinivasa Rao demanded the state government to keep its promises made before elections and come forward to save it from losses.
In case, the AP government is not initiating any move against privatisation of VSP, the trade union leaders will not hesitate to approach the court.
Recently, when the RINL management held a meeting in Delhi, the Steel Minister agreed to infuse a working capital of Rs.3,000 crore.
However, the Central government received a detailed report that at least Rs.10,000 crore is required to run the three blast furnaces in its full capacity and to pay off the debts of RINL amounting Rs 7,000 crore.
