A STEELY RESOLVE

Exactly 53 years after the Visakhapatnam Steel Plant, as it was called, was inaugurated on April 17, 1970, India’s second-largest steel-making public sector unit (PSU) is resisting its transition into private hands.

- Amarnath K. Menon

While Andhra Pradesh and its people are fighting to save the country’s shore-based integrated steel plant run by the Rashtriya Ispat Nigam Limited (RINL), the ruling Bharat Rashtra Samithi (BRS) in Telangana, too, has expressed sympathy for the anti-privatisation sentiment. Andhra Pradesh, however, does not want its neighbour’s support, which is being seen as an attempt to ‘secure the entity’ through investment by the Singareni Collieries Corporation Limited (SCCL), in which the Telangana government holds a 51 per cent stake. However, while the SCCL has deputed a team to take stock on the ground, it was not among the 22 bidders that submitted Expressions of Interest (EoI) before the April 15 deadline, which was later extended to April 20 to broadbase the bidding process.

RINL has been facing a shortage of raw material and working capital to keep the plant running. On March 27, it invited EoI from private companies and steel manufacturers to infuse Rs 5,000 crore worth of working capital, supply raw material and purchase its products. In a first, RINL even mooted the idea of swapping raw material with finished steel.

Earlier, the Jagan Mohan Reddyled state government had suggested that in order to ensure RINL’s financial turnaround, its short- and long-term loans be converted into equity, easing the repayment pressure and the interest burden. The steel plant has a debt of Rs 22,000 crore, on which it pays interest of 14 per cent.