The Department of Investment and Public Asset Management (DIPAM) has terminated the strategic dis-investment process of Visvesvaraya Iron and Steel Plant (VISP) in Bhadravati, which is a unit of Steel Authority of India Limited (SAIL).
The Union Government took this decision considering ‘insufficient bidder interest’ to invest in the unit. Employees have welcomed the Centre’s move.
There have been repeated attempts by successive governments to dis-invest the unit and hand it over to private investors.
The privatisation process began in 2000, but did not succeed.
An attempt to revamp the plant through a joint venture was made in 2013, but did not succeed.
In October 2016, the Centre took a decision to privatise the plant. An expression of interest (EOI) was issued on July 4, 2019. Now, the same has been annulled. The DIPAM issued a notification to this effect on October 12, 2022.
Shivamogga Lok Sabha member B.Y. Raghavendra told mediapersons in Shivamogga on October 15 that he had met officers of the Ministry of Steel and the ministers concerned about the withdrawal of the process. “We have to think about the way forward. All elected representatives of the district have to come to a consensus and prepare a proposal for revival of the unit, which includes a township, workers’ quarters and other properties,” he said.
The Lok Sabha member said he would discuss the issue during the winter session of Parliament with the ministers concerned and make an effort to find a solution.
Plant was set up by ruler of Mysuru
The VISP has a history of more than a century. It was set up as Wood Distillation Plant in 1918 by Nalwadi Krishnaraja Wodeyar, the erstwhile ruler of Mysuru, and M. Visvesvaraya, who was dewan (prime minister) of Mysuru. It was named as Mysore Iron and Steel Works in 1936 before being re-named Visvesvaraya Iron and Steel Plant in 1976.
At one point, the plant had as many as 12,000 employees, besides 400 workers on contract basis. It was best known for special and alloy steel. The unit began incurring losses in the 1980s. In 1998, it was handed over to SAIL.
At present, the plant has 213 permanent employees, 1,342 employees on contract basis and 56 executives.’
‘SAIL is making handsome profits, but is not investing any money in VISP’
The VISP was procuring iron ore from Kemmannugundi until 2004. Mining ended there when the area was declared a part of the Bhadra wildlife sanctuary. For many years, the plant did not have its own mine.
VISP Employees’ Union president J. Jagadish says, “Following constant efforts by the employees and local representatives, the plant succeeded in getting 150 acres in Sandur taluk of Ballari district on February 19, 2019. Now we have our own mines. We have kept the unit functioning with decades-old machinery. The plant may require about ₹2,000 crore for a total revamp. SAIL recorded a profit of ₹16,039 crore in 2021-22, but is not showing interest in investing in VISP. If we get proper investment, the plant can return to glory.”