The Visakha Ukku Parirakshana Porata Committee (VUPPC) has appealed to Prime Minister Narendra Modi to withdraw the decision on 100% strategic sale of RINL-Visakhapatnam Steel Plant (VSP).
VUPPC chairmen D. Adinarayana, Ch. Narasinga Rao and Mantri Rajasekhar submitted a memorandum to the Steel Secretary Nagendra Nath Sinha during his visit to Visakhapatnam Steel Plant (VSP) on Tuesday.
They noted that while the present capacity of VSP was 7.3 million tonnes per annum, it was being throttled to around half the capacity on the reasoning that the input cost is too high on account of not having captive iron ore mines. They said that the losses of the company had increased after the decision to go for 100% strategic sale was taken in 2021.
They said that if the present strategy of throttling the plant continues, the plant would make further losses in future. They felt that increased production could only bring down the cost of production. They recalled that when the plant was in a crisis during 1998-2001, with the support the Central and State governments, capacity utilisation crossed 100% mark, cost of production came down and the plant started making profit, for the first time since its inception, from October 2001.
The company became a ‘zero debt’ company in September 2003, profits continued to increase year after year till 2013-14 and all the dues were cleared.
The VUPPC leaders also appealed to the Prime Minister to convert the loans and interests into share capital by the Government of India, and declare a tax holiday for three years, to provide financial support for running capital till the plant stabilizes, allotment of captive mines or raw material supply from SAIL and NMDC on cost-to-cost basis to operate the plant at its installed capacity.
