The State government on Thursday passed a resolution in the Legislative Assembly opposing the decision of Cabinet Committee on Economic Affairs to disinvest the entire stake of the Union government in Rashtriya Ispat Nigam Ltd. (Visakhapatnam Steel Plant) along with management control through privatisation, and seeking the Government of India’s support to the RINL for making a turnaround.
It was mentioned in the resolution moved by Minister for Industries and Commerce Mekapati Goutham Reddy, that keeping the sensitivity of the issue in view, the State government acknowledged the need for supporting the cause of RINL. Accordingly, Chief Minister Y.S. Jagan Mohan Reddy had written a letter to the Prime Minister with a request to reconsider the proposal of disinvestment and also suggested alternative solutions that might be helpful to RINL in becoming a profitable venture.
The government pointed out that the British American Steel Works for India Consortium (BASIC) had recommended setting up of the steel plant at Visakhapatnam in the 1960s. However, the plant could be set up only after violent agitations triggered by the fast unto death of T. Amruta Rao of Gandhi Mission from Guntur, which claimed 32 lives leading up to the announcement of the sanction for it (plant)’s establishment by the then Prime Minister in 1970.
As per a report of the Ministry of Steel, RINL had an excellent layout, infrastructure including land, and large skilled workforce making it suitable to expand capacity up to 20 million tonnes of liquid steel per annum. The company incurred losses of ₹4,982 crore up to 2001-02 and capital restructuring was done by the GoI in 1993 and 1998 by way of conversion of its loans into equity and preference share capital.
RINL went on to exceed it’s rated capacity in 2001-02 and achieved a turnaround in 2002-03. It recorded a peak capacity utilisation of 120% in 2005-06 and peak profit after tax of ₹2,008 crore in 2004-05. It earned profits continuously for 13 years till 2014-15 aggregating nearly ₹12,958 crore.
While giving a detailed insight into RINL’s history and suggesting ways to put it back on rails and making a mention of its significant contribution to the supply of liquid medical oxygen required to fight the COVID pandemic, the State government expressed strong reservations against the sale of the Centre’s stake in RINL, and resolve to extend its support for protecting ‘the jewel of A.P.’