Jagan urges union minister Pradhan to stop privatizing Vizag Steel Plant

Warangal: Andhra Pradesh chief minister YS Jagan Mohan Reddy met Union Minister for Petroleum, Natural Gas and Steel Dharmendra Pradhan on Friday and reiterated his appeal to stop the privatization of the Vizag Steel Plant.

Jagan requested the union minister to consider the alternatives suggested by the state government earlier in reviving the plant. In March this year, Jagan had written a letter to Prime Minister Narendra Modi suggesting detailed measures for revival.

Besides, Jagan also said that 32 people have laid down their lives to set up the plant in Visakhapatnam, where nearly 20,000 people are employed and thousands more are having indirect employment.

In meeting with the Pradhan, the chief Minister explained that VSP performed well and made profits between 2002-2015. The plant has gone through an expansion by taking loans, but due to the slump in international market during 2014-15, the organisation fall into debts with the increasing operational costs and lack of own mines.

In fact, he said, VSP has achieved the highest ever capacity utilization of 6.3 MTPA against the installed capacity of 7.3 MTPA and started making a monthly profit of close to Rs 200 crores and continuing this performance for a further period of two years will result in improving the financial situation. The Plant has 19700 acres of land which is worth in crores and can be monetized to clear the crisis.

The excess cost of iron ore has cost implications of more than Rs 3,472 crores for the plant and it is essential to have an allotment of captive mines in order to overcome the cost disadvantage. Jagan then requested to allot the captive mine in Odisha which will help in reviving VSP.

Reddy also suggested other possibilities in restructuring the finances of VSP, where all the short-term and long-term loans could be converted into equity easing the burden. The plant has a debt of Rs 22,000 crore which is being serviced at interest rates as high as 14 percent.

Early this year, the central cabinet committee on economic affairs had approved a 100 per cent divestment of the government shareholding in Rashtriya Ispat Nigam Limited (RINL) or popularly called Vizag Steel Plant, besides RINL’s stakes in its subsidiaries and joint ventures via strategic disinvestment by way of privatization.

Jagan also held discussions regarding Kakinada Petrol Complex, that was promised and listed in the Andhra Pradesh Reorganization Act.

Chief minister YS Jagan Mohan Reddy rounded off his two-day trip to the national capital, during which he discussed wide-ranging issues of state interest with several ministers, including union home minister Amit Shah, railways minister Piyush Goyal, Jal Shakti minister Gajendra Singh Shekhawat, forests, environment and climate change minister Prakash Javadekar among others.