The functional directors cleared the proposal apparently under political pressure: CITU

CITU-affiliated Steel Progressive Employees’ Union (SPEU) has decried the decision of Rashtriya Ispat Nigam Limited’s recent board meeting to sign a memorandum of understanding with an Uttar Pradesh-based entrepreneur for supplying raw material and buying the finished products from him.

CITU leaders N. Rama Rao, J. Ayodhyaram, Y.T. Das and D. Pande stated in a press note that despite opposition by independent directors, the functional directors cleared the proposal apparently under political pressure on June 28. Union Steel Minister Beni Prasad Verma hails from UP.

The decision pertains to a rolling mill being set up by a private entrepreneur near Lucknow at a cost of Rs.400 crore for which RINL has to supply billets and later buy the converted rods at a high price by bearing the freight cost. The CITU leaders said the decision would not benefit Visakhapatnam Steel Plant in anyway and cited how RINL management was spending huge amounts under corporate social responsibility and setting up a Rs.1,000-crore forged wheel plant in Rae Bareli (UP) and axle plant in New Jaipalguri (West Bengal).

Meanwhile, Visakha Steel Employees’ Union (VSEU) said the decision to patronise 0.75 million tonne rolling mill at Gondia in UP would be a big financial loss to VSP.

Union honorary president Padi Trinadha Rao said the recent actions of the management would be counter-productive for the plant and sought the intervention of the government to not implement such decisions. The executive committee of the union, which met on Saturday strongly, opposed investments being made by the management outside the State due to political considerations.

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