VSP privatization: Jagan writes to Modi, voices concern over FM statement
A day after Union Finance Minister Nirmala Sitharaman asserted that the centre would go ahead with privatization of RINL, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy wrote to Prime Minister Narendra Modi voicing concerns over the disinvestment plans.
By Sumit Jha Published on 9 March 2021 8:04 AM GMT
Visakhapatnam: A day after Union Finance Minister Nirmala Sitharaman asserted that the centre would go ahead with privatization of RINL, Andhra Pradesh Chief Minister YS Jagan Mohan Reddy wrote to Prime Minister Narendra Modi voicing concerns over the disinvestment plans.
On Monday Sitharaman told Parliament that the Government of India would go ahead with the plan of 100 percent disinvestment in RINL and its subsidiaries.
Jagan said it is a matter of great concern for the people of Andhra Pradesh, employees of RINL, and other stakeholders.
He said the sentiments of the people are attached to RINL. "In my letter on February 6, I had clearly mentioned the problems being faced by RINL, Visakhapatnam, suggested various solutions to revive the same. I had requested to reconsider the decision of 100% strategic disinvestment. I had also addressed the union Minister for steel offering my suggestions to revive RINL and make it financially strong," said the CM.
Jagan noted RINL is the largest public-sector industrial unit in the state providing employment to around 20000 people directly. He said it is India's first shore-based integrated Steel Plant and a producer of long steel products catering to the requirements of the Construction, Infrastructure, Manufacturing, and Automobile sectors.
"This plant was realized only after many sacrifices by our people. The people of my state rallied for the Visakhapatnam Steel Plant in which 32 people have laid down their lives. On April 17, 1970, the then Prime Minister of India announced the government's decision to establish a steel plant at Visakhapatnam culminating the decade-long public agitation. Visakha Ukku-Andhrula Hakku in the undivided Andhra Pradesh," he said.
The chief minister said the plant had a good performance between 2002 and 2015 earning profits with positive Net worth. "The company has around 19700 acres of land currently and the valuation of these lands alone could exceed one lakh crore rupees due to the location of the plant in the urban area and rapidly expanding urban sprawl. RINL currently has a capacity of 7.3 Million Tonnes and has taken up plant modernization and capacity expansion recently which made the plant borrow loans from banks to take up the expansion. Owing to the unfavorable 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 the high cost of production is the absence of captive mine thereby affecting the profitability," he said.
