KTR writes to Centre opposing privatisation of Vizag Steel Plant

"Vizag steel is the right of Telugu people and the responsibility is on us to save the steel plant" said KTR

By Newsmeter Network  Published on  2 April 2023 11:12 AM GMT
KTR and Vizag Steel Plant

Hyderabad: Telangana minister and working president of the Bharat Rashtra Samithi (BRS) K.T. Rama Rao has written an open letter to the Central government expressing the party’s commitment to stand by the employees of the Vizag Steel Plant (VSP) and opposes the government’s plan to privatise the plant. In the letter, KTR penned his views on the causes behind the plant’s financial losses and suggested measures to revitalise it.

According to KTR, the Indian government has been conspiring to push VSP into losses and using this as an excuse to privatise the plant. He claims that the government did not allow the special iron ore mines to the steel plant, forcing it to spend up to 60% of its production cost on raw materials. In contrast, private companies spend less than 40% on raw materials as they were allotted iron ore, coal, and other mines. This puts the VSP at a disadvantage as it had to compete with private companies in the market, leading to losses.

KTR argued that an Expression of Interest (EoI) notification was issued by the Modi government to mobilise funds for working capital and raw materials, but it is a veiled attempt to hand over the plant to private entities, he said. He demanded that the Centre cancel the EoI notification immediately.

KTR proposed a detailed plan to revive the PSU, including merging it with the Steel Authority of India Limited (SAIL) to contribute to SAIL’s expansion goals. He also suggested that if the Centre extends support, VSP can work at full capacity, generating profits and competing with private companies. KTR called on the government to stop conspiring to privatise a PSU with assets worth Rs. 1.5 lakh crores and extend Rs. 5,000 crores financial assistance to the steel plant.

The minister pointed out that during a previous financial crisis faced by the Vizag Steel Plant, Prime Ministers PV Narasimha Rao and Atal Bihari Vajpayee had provided financial support to the PSU. He further recommended that the Central government should consider purchasing steel from VSP for use in large-scale infrastructure projects within the country and pay for it in advance.

“The Vizag steel plant is allowed for loan monetisation up to Rs. 25,000 crores only. However, private companies having the same amount of assets as that of the Vizag Steel Plant are allowed to raise loans up to Rs. 70,000–80,000 crores,” KTR added.

He directed the BRS AP unit president, Thota Chandrashekar, to extend solidarity to the workers of the steel plant and said, “Vizag steel is the right of Telugu people and the responsibility is on us to save the steel plant.”

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