The Hindu : Andhra Pradesh / Visakhapatnam News : Disinvestment move kicks up row in RINL

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Andhra Pradesh

Andhra Pradesh - Visakhapatnam

Disinvestment move kicks up row in RINL

Santosh Patnaik

Ministry of Steel is said to be vigorously pursuing the proposal

Plan is to start with diluting equity up to 25 per cent
Union to oppose privatisation move tooth and nail

VISAKHAPATNAM: The Ministry of Steel’s keenness to pave the way for disinvestment of Rashtriya Ispat Nigam Limited – the corporate entity of Visakhapatnam Steel Plant has generated a lot of heat here again.

Sources told The Hindu that the Ministry wants to pursue the proposal vigorously.

The disinvestment talk had generated heat in 2000 after the Group of Secretaries on Disinvestment had recommended offloading 51 per cent stake. Later, it was cleared in 2005-06 and the board of RINL gave its stamp of approval in December 2007.

The plan now is to start with diluting equity up to 25 per cent – 5-10 per cent equity for employees of RINL and the remaining for others.

Investment plans

The reason pointed by the protagonist of disinvestment is that RINL has huge investment plans to buy 50 per cent equity in Orissa Mineral Development Corporation and Neelachal Ispat Nigam Limited for raw material security. There is also huge fund requirement to go ahead with its ambitious expansion plan.

As per the corporate plan, which of course keeps changing from time to time, RINL needs Rs.8,692 crores to expand capacity of VSP from three to 6.3 million tonnes. The plan envisages raising the capacity to 16 million tonnes by 2017-18 with an investment of Rs.26,000 crores.

Earns profits

RINL Chairman and Managing Director P.K. Bishnoi had told reporters in Kolkata recently that they were waiting for disinvestment policy by the Central Government. He also hinted at going public.

RINL, at present, has paid-up equity of Rs.5,000 crores and preferential equity of Rs.2,900 crores. After making a turnaround, RINL has earned profits for seven years in a row.

Foul play suspected

The Visakha Steel Workers’ Union, the recognised union of Visakhapatnam Steel Plant, suspects foul play behind the talk of conferring Navaratna status and going public.

“By opening floodgates for disinvestment, the UPA Government wants to hand over VSP on a golden platter to private hands,” say union president D. Adinarayana and general secretary N. Rama Rao.

They said the agitation for the steel plant had claimed 32 lives and they would under no circumstances allow privatisation of RINL.

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