Steel Executives Association Representatives Meet Visakhapatnam (North) MLA To Discuss Problems Faced By RINL

As the clamour for re-merger of Vishakha Steel Plant of the Rashtriya Ispat Nigam Limited (RINL) with Steel Authority of India Limited (SAIL) grows, representatives of Steel Executives Association (SEA) including its President Katam SS Chandra Rao and General Secretary KV D Prasad met Visakhapatnam (North) MLA Vishnukumar Raju in his office and congratulated him for being elected for the second term with a huge majority. They recalled 2014-19 tenure as MLA for the first time and many meaningful discussions made by Vishnukumar Raju in the first Legislative Assembly of the divided Andhra Pradesh. Subsequently, several problems faced by Visakha Steel were explained.

The situation with Visakha Steel (Rashtriya Ispat Nigam Limited, RINL) highlights significant financial and operational challenges, exacerbated by the privatization plans and lack of working capital. Here’s a summary of the key issues and proposed solutions:

Key Issues:

Financial Strain:

• RINL generated a profit of ₹940 crore in the financial year 2021-22 with a production of 5.7 million tonnes.
• Due to a lack of working capital and the closure of the third blast furnace, production was reduced, leading to losses.
• Salaries, statutory payments like PF and pensions have not been paid for the past six months.

Operational Challenges:

• The production of the 340 MW thermal power plant is halved due to a lack of money to buy boiler coal.
• Continuous power supply is needed; currently importing around 100 MW power from the state government’s Eastern Power Distribution Company (EPDCL) every month.
• Monthly electricity bill has increased from ₹20 crores to ₹100 crores, and RINL has been unable to pay on time for the past six months.

Lease and Raw Material Issues:

• Renewal of the manganese mines lease at Garbham, Vizianagaram district, stopped by the previous government, needs immediate action.
• Visakha Steel needs working capital or raw materials to increase production; issued an Expression of Interest (EOI) for advance money or raw materials in exchange for products.

Government Support:

• The state government was asked to provide immediate financial assistance.
• A one-man committee formed to assess feasibility of financial support; reported benefits for both Visakha Steel and the state.
• Proposal for a ₹2000 crore advance from the state government for using Visakha Steel products in state projects, especially for building houses for the poor.

Proposed Solutions:
Immediate Actions:

• Renewal of the Manganese Mines Lease: Renew the lease of manganese mines in Garbham, Vizianagaram district.
• Electricity Bill Relaxation: Provide relaxation for a period of six months for the payment of electricity bills, allowing payment in installments.

Long-term Solutions:

• Re-merging with Steel Authority of India (SAIL): This could provide the necessary support and integration into a larger network.
• Full Capacity Operation: Expand Visakha Steel’s capacity to 7.3 million tonnes with an investment of approximately ₹20,000 crores.
• Government Financial Support: Immediate financial assistance of ₹2000 crores and usage of Visakha Steel products in state projects.
• GST Exemption: Exempt the ₹2000 crores GST share of the state to ease the financial burden.

Political and Administrative Actions:

• State Government Intervention: The state government, particularly Chief Minister Chandrababu Naidu, should provide immediate financial assistance.
• Discussion in Assembly Meetings: Issues to be discussed in upcoming assembly meetings with a commitment from Vishnukumar Raju to push for support.

Conclusion:

Immediate and long-term support from both state and central governments is crucial for stabilizing Visakha Steel. Addressing financial issues, operational challenges, and providing strategic support could ensure the plant’s sustainability and contribution to the state’s development.