Official sources indicated that the Narendra Modi-led government has decided to keep aside its proposal to privatize Visakha Steel Plant, following the forceful opposition conveyed by Chief Minister Chandrababu Naidu. And now, the government is exploring alternate options for the smooth functioning of the plant.
Presently, even banks are not coming forward to provide loans for the purchase of raw materials. So the central government is focusing on providing financial resources. As a result, the Union Steel Ministry has released Rs 1,650 crore in two installments, which are expected to be used for legitimate payments only.
The Department of Steel has suggested that these funds should be paid to the banks that refused to lend and restore the loan leverage. That provision was also enforced by the management. With that, the banks gave necessary letters of credit to import coal from abroad. Coal will arrive in another 3-4 days.
Arrangements are being made to start production in the second blast furnace from 27th of this month. There has been a demand for allocation of iron ore mines for the Visakha steel plant for two decades to avoid a shortage of raw materials. Central and state governments ignored it.
Now, it is not in a position to get mines in auction competing with other plants. That is why the trade unions have proposed that if this plant is merged with the Steel Authority of India (SAIL), which may resolve the problem of raw materials, this seaside plant can be useful for exports and imports for SAIL as well.
But the Center seems to be finding it difficult to make a merger proposal. However, trade unions are not convinced with the government’s assurances against privatization. They are making it clear that they can believe only if the Visakha plant is removed from the list of the Department of Investment and Public Asset Management (Deepam) under the Finance Department.
The Modi government had earlier decided to disinvest in steel as a non-strategic sector. As a part of that, efforts were made to privatize Visakha Steel. So, the unions are arguing that only after it is denotified from Deepam, can they convince the government to stop the privatization move.
