The Center has come forward to provide a special financial package to the Visakhapatnam Steel Plant, which is in deep financial trouble. The Cabinet Committee on Economic Affairs has approved this to this extent, and the Union Ministers will officially announce it today. A total of Rs. 11,500 crore will be provided by the Center.
Union Ministers Kumaraswamy and Rammohan Naidu are likely to officially announce it later today. Chief Minister Chandrababu Naidu has taken special care to bring back the former glory of the Visakhapatnam Steel Plant. He has visited Delhi several times and held discussions with Union Ministers.
Recently, he met the Prime Minister and requested him to provide the necessary financial assistance to Visakhapatnam Steel. It seems that the Union Cabinet Committee on Economic Affairs has approved this package after discussing it from various angles. The Visakhapatnam Steel Plant, which has a steel production capacity of 7.3 million tonnes per year, is mired in losses.
In 2023-24, it incurred a loss of Rs. 4,848 crore and in 2022-23, it incurred a loss of Rs. 2,858 crore. The plant slipped into losses due to the increase in loans taken for working capital. Steel Minister Kumaraswamy visited the plant. At that time, Visakhapatnam MP Sribharat, TDP state president Palla Srinivasa Rao and trade union leaders requested him that Rs. 18,000 crore was needed to revive the plant.
A few days later, Rs. 18,000 crore was released for GST payments under the Central Steel Emergency Advance Fund. 500 crores, and Rs. 1,150 crores for bank loans related to raw materials in two installments. In addition to the burden of loans taken for working capital, the Visakhapatnam Steel Plant is in serious trouble due to lack of sufficient raw materials, court attachments, and insolvency proceedings.
The Central Government has already told the Standing Committee of Parliament that it is preparing a comprehensive plan to get the company out of these and to save it from future difficulties. The Committee recommended a decision on this soon in its report submitted to Parliament.
Accordingly, it is reported that the Central Government has now come forward to provide a financial package. It is reported that Rs. 10,300 crores are being prepared through bond redemption and the remaining amount is being raised through other means. The modalities of the entire package will be revealed in the official statement of the Union Minister.
