The Cabinet Committee on Economic Affairs (CCEA) has proposed the idea of 100% strategic disinvestment of the Government of India’s shareholding in Rashtriya Ispat Nigam Ltd, which paves way for privatizing the firm.
The decision has resulted in trade unions and political parties staging protests in the shore city Vizag.
Following this, YSRCP supremo, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy wrote to Prime Minister Narendra Modi. In the letter, Jagan urged the latter to reconsider his decision.
Visakhapatnam Steel Plant is the largest public-sector industrial unit in the state. If the Union government takes supportive measures like allotting captive iron ore mines to bring down the input costs, swapping high-cost debt with low-cost debt, and converting debt into equity through equity conversion,’ VSP would turn out as a profitable firm.
‘Owing to the unfavourable steel cycle globally, the company was making losses since 2014-15 and was finding it difficult to service the debt. One of the major structural issues that also leads to a high cost of production is the absence of captive mine thereby affecting the profitability,’ Jagan added in the letter.
Calling the Visakhapatnam Steel Plant as the jewel of the state, Jagan Mohan Reddy in the letter to PM maintained that his government is ready to work with the Ministry to save it.
‘RINL the corporate entity of Visakhapatnam Steel Plant (VSP) a Navratna Company under the Ministry of Steel, currently has a capacity of 7.3 million tonnes per annum and took up plant modernisation and capacity expansion borrowing loans from banks,’ he said