NDA leaders rule out privatisation of Vizag Steel Plant

Leaders of India’s ruling alliance have firmly ruled out privatisation of the Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of the Visakhapatnam Steel Plant (VSP), in a bid to put to rest the continuing speculation over the future of the public sector unit.

At a joint press conference in Visakhapatnam on Tuesday, local MP M. Sribharat and Telugu Desam Party (TDP) state president and MLA Palla Srinivasa Rao said that rumours of a sell-off were being deliberately fuelled by Opposition parties and trade unions to create panic among employees and the public.

“If privatisation was the intent, why would the Union government sanction a revival package of over Rs 11,400 crore? Why would the State government defer payment of massive dues towards water and power charges?” asked Srinivasa Rao, emphasising that both the Centre and the State were working together to support the steelmaker.

The leaders addressed apprehensions surrounding the recent Expression of Interest (EoI) floated by the VSP management for outsourcing operation and maintenance of some critical units. Critics have argued that this was the first step towards privatisation, but Srinivasa Rao rejected the charge.

“VSP already has 600–1,000 sub-contractors and nearly 15,000 contract staff engaged across different units. Outsourcing for specialised maintenance is not new. The current EoI is only to streamline the process and bring in more expertise, not to hand over the plant to private ownership,” he said.

Sribharat explained that one of VSP’s major challenges has been the lack of captive iron ore mines, forcing it to buy ore at market rates. He noted that the company had in fact acquired mines in Odisha, but utilisation was delayed due to legal disputes.

On criticism that rival steel producer ArcelorMittal Nippon Steel (AM/NS) had been favoured with captive mines, he clarified: “AM/NS secured those mines through auction, at the same rate that VSP is currently paying in the open market. VSP too can participate in auctions, but since it already owns mines in Odisha, albeit caught in litigation, it may not be eligible to bid further.”

Both Sribharat and Srinivasa Rao stressed that the turnaround of VSP depended largely on boosting production levels. “If all three furnaces run at full capacity and efficiency is improved, VSP can break even and return to profitability. Once that happens, merging VSP with the Steel Authority of India Limited (SAIL) is a viable option still open for discussion,” they said.

Srinivasa Rao also revealed that Chief Minister N. Chandrababu Naidu had proposed setting up a slurry pipeline to transport iron ore more economically, on the lines of the facility used by AM/NS. Such a project, he said, could significantly reduce input costs and improve VSP’s competitiveness.

Visakhapatnam (North) BJP MLA P. Vishnu Kumar Raju reminded that privatisation of loss-making units was a broad economic policy decision taken in the 1990s, and not a fresh initiative under the current NDA government. “Our position is clear: the NDA stands committed to retaining VSP as a public sector undertaking,” he said.

Local legislators, including TDP MLAs PGVR Naidu and Velagapudi Ramakrishna Babu, as well as Jana Sena Party MLA Vamsikrishna Yadav, were also present at the briefing, underlining the united stand of the NDA partners on the issue.