Gulte News
The central government’s announcement of its intention to privatise Vizag Steel Plant (VSP) triggered widespread protests in Andhra Pradesh. Following the opposition, Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy has written a letter to Prime Minister Narendra Modi, requesting the Centre to reconsider its plan of disinvestment of Rashtriya Ispat Nigam Limited, popularly called as VSP and urged the Centre to explore opportunities to revive the plant.
In the letter, CM Jaganmohan Reddy promised to work closely with the Centre to protect the “jewel of Andhra Pradesh.”
Jagan’s letter comes close on the heels of Visakhapatnam North MLA’s resignation and the Left parties taking out a huge rally against the Centre’s proposal.
Jagan termed VSP, the country’s first shore-based steel factory established in 1971, “a testimony to the will of Telugu people and it is continued as an icon of Telugu achievement in our collective psyche till date.”
He also reminded that 32 people laid down their lives for the plant and that the plant was sanctioned after a decade-long public agitation “Visakha Ukku-Andhrula Hakku” done in undivided Andhra Pradesh.
Jagan suggested three immediate measures to revive the steel factory to the PM. These include continuing the operations to achieve a turnaround, earmarking captive iron ores mine to the plant and financial restructuring.
Continuing the operations of the plant would help in witnessing V-shaped recovery, he said. He sought captive iron ore mines to reduce input costs. He said that the RINL is purchasing iron ore from NMDC Bailadila mines at market price, which puts a cost disadvantage of around Rs 5,260 per MT of steel (at ore level). Allotment of captive mines will help RINL tide over its cost disadvantage, he pointed out.
The CM also sought financial restructuring under which short-term and long-term loans could be converted into equity, taking off repayment pressures and interest burden.
Reddy stated, “The plant performed well between 2002 and 2015, earning profits with positive net worth. The company owns 19,700 acres of land and the value of these lands itself would exceeds Rs 1 lakh crore due to location of the plant in a metropolitan area and rapidly expanding urban sprawl.”
TDP chief and former Andhra CM Chandrababu Naidu too targeted the YCP government asking what was the state government doing when the VSP which directly employs 18,000 permanent employees, 22,000 contract employees and indirectly employs millions is being privatised.
Tags CM Jagan CM Jagan Letter To PM Modi PM Modi Vizag Steel Plant Privatisation
