More Trouble For Vizag Steel Plant!

Ever since the central government announced last year about 100 % disinvestment in Rashtriya Ispat Nigam Limited, the corporate entity of Vishakapatnam Steel Plant, there has been a lot of hue and cry from all quarters to revoke its decision. Despite widespread protests from the employees of the steel plant and the general public in Telugu States, the government remained hell-bent and initiated the process.

Meanwhile, the steel plant has been receiving several setbacks from all corners which are likely to push it into a further crisis before disinvestment. After facing a shortage of coking coal earlier this year, the plant is now facing a fresh crisis due to the shortage of iron ore. This problem has arisen due to the reduction in the supply of iron ore from NMDC-run coal mines in Chattisgarh. Two months ago, when the NMDC was not supplying an adequate quantity of ore to the plant, the central government intervened to increase the supply. However, due to the inclement weather conditions, the transport of ore through railways has become a huge problem resulting in a shortage of supply.

The central government seems to be paying a deaf ear to the ongoing crisis at the steel plant and this appears to be a part of its strategy to carry on with the disinvestment process very soon. It is pertinent to note that due to a lack of government intervention, there has been a huge dearth in the supply of raw materials to the plant in the last couple of years. This has forced the authorities to close two blast furnaces in the last 21 months, resulting in further deterioration of the production in the plant.

Reportedly, the plant is likely to incur a massive loss of 140 crores every week due to the present scenario which is likely to add more woes to the already debt-ridden organisation. There has been a huge clamour that the BJP-led government is trying its best to sell the plant to those corporates who are supporting it.

Meanwhile, it is now the turn of its employees to bear the brunt of the losses incurred by the plant because there is no adequate amount in the coffers to pay monthly salaries. The plant boasts 14,500 employees in various cadres and they usually get salaries on the 30th or 31st of every month. But, the current cash crunch has delayed their salaries this month. To pay its employees, the organization will need 80 Crores every month. But, it is now left with a meagre 10 Crores which is the reason behind the delay in payment of salaries.

As the fate of the iconic Vishakapatnam Steel Plant hangs in balance, the central government is just waiting for more crises to unfold.