Creation of mega steel giant suggested to prevent Visakhapatnam Steel Plant disinvestment

Visakhapatnam: The Ministry of Steel has four PSUs related to mining, iron and steel making – National Mineral Development Corporation (NMDC) and Steel Authority of India Limited, Rashtriya Ispat Nigam Limited and Kudremukh Iron Ore Company Limited -- each having different strengths, pointed out former Chairman and Managing Director of Rashtriya Ispat Nigam Limited Y Siva Sagar Rao and retired IPS Officer VV Lakshminarayana on Friday.

Sharing details with the media on a slew of measures which can be adopted to stop Visakhapatnam Steel Plant (VSP) from privatisation and revive it into a profit-generating entity, they said, merger of RINL with the NMDC along with other PSUs will be the first step towards establishing a 'steel giant' and this will resolve the issue of 'no captive mines' of the RINL once for all.

Listing a host of measures, Siva Sagar Rao and Lakshminarayana dashed a 13-page letter to Prime Minister Narendra Modi, appealing to him not to go for the strategic disinvestment of RINL.

Of the 19,703 acres that are presently in the possession of RINL, 10,370 acres are covered by the plant, offices, township etc. and 6,503 acres of land is under the green belt and the rest constituting 2,830 acres is reserved for future expansion purpose, Lakshminarayana mentioned.

"But the land is held in the name of the President of India and not in the name of RINL. The value of this entire stretch of land is shown in the balance sheet as worth Rs 55.82 crore only. However, the present market value of this land can be put at Rs 60,000 crore," he informed.

After a thorough analysis and consulting with the stakeholders, Siva Sagar Rao and Lakshminarayana said they have submitted alternatives and feasible models for the revival of the VSP which will not only fulfill the Centre's vision of development by unlocking huge asset value of the plant but also keeping the morale and sentiments of Telugu people high.

While merging RINL with NMDC, the government may transfer the land of about 16,872 acres, which is in the name of the President of India covering the existing operating plant, township, two reservoirs, green belt to RINL and the remaining land of about 2,830 acres may be explored by Government of India for further industrial development which could fetch to the tune of Rs 9,000 crore, contributing to the target of disinvestment, they mentioned in the letter.

The proposed mega steel giant, they said, is likely to result in the reduction of raw material cost and the cost of production of steel due to resource sharing.

Given the present scale of production, they added that it is likely to result in savings to the tune of Rs 18,000 crore per annum along with sharing technical expertise.