KTR opposes VSP privatisation; demands Rs.5000 crore financial aid to Steel Plant
Industries Minister KTR demanded the Union government to stall the conspiracies of handing over the VSP, which was valued at Rs.1.5 lakh crore.
Hyderabad: Assuring all support to workers unions of the Visakhapatnam Steel Plant (VSP), Industries Minister and Bharat Rashtra Samithi working president KT Rama Rao on Sunday demanded that the Centre drop its plans to privatize the steel plant and instead to examine the possibility of merging the VSP with the Steel Authority of India Limited.
In an open letter to the Centre here on Sunday, the Minister reiterated that the BRS would resist all attempts to privatize the VSP. Party President and Chief Minister K Chandrashekhar Rao had announced earlier that the BRS would fight against privatization of public sector units including the VSP and the LIC.
Also Read
Detailing the plans of the Modi government to hand over the VSP to private players, the reasons behind the VSP incurring losses and the ways in which the plant could be revived, the Minister said that as part of the conspiracy to privatize the steel plant, VSP would be pushed into losses and the crisis would be shown as an excuse to hand it over to crony corporate companies.
The Centre had not allowed special iron ore mines to the steel plant, due to which the steel plant was forced to spend up to 60 per cent of its production cost on raw material. On the other hand, the production cost of raw materials in private companies was less than 40 per cent as iron ore, coal and other mines were allotted to them. Consequently, VSP was facing challenges while competing with private corporate companies in the market in terms of production and facing losses while selling at the same price as the private players.
The enterprise was in distress as coking coal has to be imported and iron raw materials needed for steel production were being bought at market rates from the NMDC.
“Due to this, more than 50 per cent of production had to be stopped for a year. All of this is part of a conspiracy to push the Vizag Steel Plant into losses and use it as an excuse to privatize the steel plant. PM Modi has written off loans worth Rs.12.5 lakh crore for his corporate friends. Why is he not showing the same generosity to the VSP?” he asked.
Stating that an Expression of Interest (EoI) notification was issued in the garb of mobilizing funds for working capital and raw material, the Minister said the Modi government was indirectly attempting to handover the PSU to private entities through the notification, and demanded that the Centre immediately cancel the EoI notification.
Also listing out a detailed revival plan for the PSU, Rama Rao said SAIL had already announced its expansion plans with a cost of around Rs.1 lakh crore. Suggesting merger of the VSP with SAIL, he said this would be more advantageous than selling the steel plant to private companies at a low price.
“This will contribute towards SAIL’s expansion goals. If the company moves in this direction, then an ecosystem can be created to fulfill a long standing demand of a steel factory in Bayyaram in Telangana and a steel plant in Kadapa as well,” he said.
Stating that VSP was not able to operate at its full capacity of 7.3 MTPA as the Centre was not providing raw materials and capital, he said the enterprise, which was now working at 50 percent of its capacity was incurring the same production cost it would incur for working at 100 percent capacity. If the Centre provided loans on par with private companies and provision of capital through banks, VSP could compete with private companies, he said.
Demanding a financial assistance of Rs.5,000 crore to the steel plant, Rama Rao reminded when VSP faced a financial crisis earlier, Prime Ministers PV Narasimha Rao and Atal Bihari Vajpayee had bailed out the PSU by extending financial support. He also suggested that the Centre purchase steel from VSP for large scale infrastructure projects in the country and pay in advance.
“The VSP is allowed for loan monetization up to Rs.25,000 crore only. However, private companies with the same amount of assets are allowed to raise loans up to Rs.80,000 crore,” the Minister said, also directing BRS AP unit President Thota Chandrashekar to extend solidarity to the workers of the steel plant. “Vizag steel is the right of the Telugu people and the responsibility is on us to save the steel plant,” he said.
