Save Vizag Steel Plant!

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The Union Cabinet approved 100% disinvestment of Rashtriya Ispat Nigam Ltd (RINL) which is the Public Sector Undertaking which runs Visakhapatnam Steel Plant(VSP). This decision must be taken back.

Did you know?

  • Being the only steel PSU without captive mines, the Vizag Steel Plant is forced to incur heavy losses on raw material. While firms with captive mines spend ₹1,500 per tonne on iron ore, VSP spends ₹7,000.
  • Since Center did not provide funds for expansion, VSP was forced to rely on a 10-year ₹22,500 crore debt plan for its expansion. Hence increasing interest payments are eating into profits. 
  • Vizag Steel Plant, which started production in 1992, has paid more than ₹40,000 crores in taxes to state and central governments till 2020.
  • VSP had made annual profits of ₹445 crores on average since 2000.
  • Vizag Steel Plant provides livelihood to about 33,000 persons directly, another 40,000 persons are depending on the steel plant in the allied activities. This not to mention the economies of agglomeration since Steel Plant is like a mini-city in itself.
  • Steel-making is considered a strategic sector by the same government which approved Vizag Steel's privatization.
  • Vizag Steel Plant became a reality only after the 'Visakha Ukku Andhrula Hakku' agitation that shook Andhra Pradesh. 32 persons sacrificed their lives, 64 villages were evacuated and 22,000 acres of land were sacrificed to build this gigantic steel plant.

To understand the detailed, practical reasoning why Vizag Steel Plant must not be privatized, please read this article.

What is the solution?

  1. As a first step, the Government of Andhra Pradesh must pass a resolution in the Andhra Pradesh Assembly demanding that the Union Cabinet decision to privatize Vizag Steel Plant be taken back. When the state government in power passes such a resolution, it adds further legitimacy to the protests and helps to put pressure on the Center.
  2. Next, the Central Government must take back the decision to privatize Vizag Steel Plant and follow the example of former Prime Minister Atal Bihari Vajpayee. As Prime Minister, instead of privatizing VSP, he focused on reviving it. Vizag Steel Plant actually turned around and even became debt-free by repaying all long-term debts in 2003-04. We ask the Central Government to adopt this approach and fulfill the long-pending demand of allocating captive mines immediately.