The decision to privatise the Vizag Steel Plant has drawn a massive protest in the port city of Visakhapatnam. Concerns have raised over Centre’s announcement to target a sum of Rs 1.75 lakh crore for FY 2021-22 through divestment, focusing mainly on firms which are incurring heavy losses. Now, the Union Cabinet’s decision to target Rashtriya Ispat Nigam Ltd citing losses has led to massive criticism. It is also being learned that the plan to privatise Vizag Steel Plant had been on since 2019. In this context, it may be noted that actor Sivaji on social media and Vizag Steel Plant Employees Union Ramchandra Rao had spoken about the issue of privatisation in the recent past.
Incurring losses?
It is being speculated that the Vizag Steel Plant Management had deliberately planned to push the company into incurring losses. Sadly, though the VSP Employees toiled their sweat and blood to get the Navaratna Status, after 2019 the firm has been running into losses. Especially, lack of captive iron ore mines unlike other steel companies in India, the firm had to depend on other companies. As a result, to produce a ton of steel would cost an additional charge of Rs 3000. Also, the huge interest on loans and lack of subsidies by the Centre have worsened the situation. In this scenario, the Vizag Steel Employees state that if Central Government would allocate iron ore mines then definitely VSP would emerge as the Number One steel producer in India. Telugu people have a special place for Vizag Steel Plant in their hearts as it is a matter of their pride. Hence the slogan: ‘Vizag Steel – Pride of Steel’.
Non-Binding Agreement
Discussion is that major decisions can be taken easily as the Vizag Steel Plant doesn’t fall under the purview of Steel Authority of India Limited. Earlier, the plant which began with a capacity of 3 million tonnes, had begun producing 7.3 million tonnes of steel by 2017. However, the plan to privatise VSP began in 2019. Earlier, when late YS Rajasekhara Reddy was the AP CM, prior to the founding of Brahmani Steel, officials of South Korean steel-making company POSCO had visited AP. However, due to some reasons, no allocations were made in the state during the time and they were limited to Odisha. However, after 12 years POSCO made a reentry into Andhra Pradesh and an MoU had been inked between RINL and the South Korean steel firm post-April 2019. A non-binding agreement was made for the supply of 5,00,000 tonnes of steel between both the entities. Now the Vizag Steel Employees allege that there’s a conspiracy behind such an agreement as it is impossible to produce five lakh tonnes of steel yearly, as there are only two Steel Melting Shops (SMSs). Now, having inked a pact to produce steel beyond capacity is being questioned. Now, with the agreement having been made, VSP needs to produce the said quantity and deliver it to POSCO, else face legal issues.
