The agitation against 100% strategic sale of the Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), will be entering 1,000th day on November 8.
The resilient employees, in collaboration with various trade unions, have been able to stall the efforts of the Union Government to sell the company to a private entity.
Soon after Finance Minister Nirmala Sitharaman had announced the strategic sale of RINL on January 27, 2021, the employees and trade unions such as CITU, AITUC and INTUC quickly joined forces to form the Visakha Ukku Parirakshana Porata Committee (VUPPC) to take the agitation forward.
Valuation process scuttled
The struggle committee has been able to stall all attempts to privatise the plant. In fact, the valuation report could not be prepared so far, as members of the committee had to backtrack following stiff resistance from the employees.
In November 2021, the Union Government had constituted two committees to get the valuation done. On November 10, members of one committee were taken into the plant by a helicopter from the Visakhapatnam airport. But, by the time they could value the blast furnaces, over 1,000 employees gathered and stalled their process.
Any strategic sale has three phases — valuation report by a committee, Expression of Interest, and bidding.
As the valuation report is not ready, there is no scope for EoI and bidding. “We will not let the plant be sold to a private entity at any cost. We do not mind if it is given to SAIL,” says Ch. Narasinga Rao of the CPI (M), who is also the chairman of the VUPPC.
The employees and trade unions are hopeful that the Union Government will rethink its decision as it did in the case of NMDC’s Nagarnar’s Steel Plant in Chhattisgarh.
In the case of Nagarnar Steel Plant, the bidding had almost been completed, but due to stiff resistance from the employees and people, Union Home Minister Amit Shah, at a recent election rally, withdrew the decision. Similar was the case of Salem Steel Plant too, Mr. Narasinga Rao said.
Emotional issue
People of Andhra Pradesh in general and Visakhapatnam in particular have a sentimental connection with the VSP. The plant had been established after a decade of agitation from 1960 and the death of 32 protesters in police firing in November 1969. The foundation stone for the plant was laid in 1971.
“It was the first and the only shore-based integrated steel plant. Production started in the plant in 1988. The plant is emotionally attached to us,” said Ch. Adinaryana, another chairman of the VUPPC.
“Though all the parties have expressed their solidarity with us, none of them, including the ruling YSR Congress Party and the Opposition TDP, have taken it up seriously with the Union Government,” he alleged.
In the last three decades, the VSP had clocked profits in a number of years, including in the FYI 2021-22, when it had achieved a net profit of about ₹960 crore. But last year, it had incurred a loss of about ₹3,900 crore, and the VUPPC alleged that it was done intentionally to provide grounds for the sale of the plant.
No captive mines
The major issue plaguing the VSP is that it is the only steel plant that has not been allotted captive iron ore mines.
Though one tonne of iron ore costs a maximum of around ₹900, the VSP buys it from the private market at a cost of ₹4,000 to ₹5,000. This has always impacted the VSP’s production cost.
Despite MN Dastur & Company, in its initial project report in the early 1970s, had suggested that captive iron ore mine was a basic necessity, it was not been allotted.
“Every other plant, including private steel plants, have their own captive mines. This has been the ploy of the Union Government from the very beginning. It wants to kill the plant, and now it has stopped the third blast furnace to reduce its production,” the union leaders alleged.
The actual capacity of the plant with three blast furnaces is around 7.2 million tonnes, but it is producing close to 5 MT.
VUPPC demands that VSP be allotted iron ore mines to enable it to run at its full capacity. “If this happens, the plant will turn profitable in no time,” said members of the Steel Employees’ Association (SEA).
In the recent times, there was a proposal to handover the third blast furnace to a private company. “We will oppose it tooth and nail,” the SEA members said.
