VISAKHAPATNAM: Chief Minister Y.S. Jagan Mohan Reddy on Wednesday asserted that his government is firm in opposing privatisation of Visakhapatnam Steel Plant (VSP) and said he has suggested to the Centre how VSP can be turned around.
He was speaking to a Joint Action Committee of 14 trade unions, which called on him at the Visakhapatnam Airport lounge. The Chief Minister pointed out that he has already addressed a letter to Prime Minister Narendra Modi suggesting that captive iron ore mines in Odisha be allotted to the Vizag steel plant.
He pointed out that VSP started making losses after the lease period of mines from where it used to get iron ore ended. The same needs to be revived, he observed.
The CM pointed out that these mines still have 200 million tonnes of reserves. The lease could be revived within four months, he said. On mines in AP, he underlined that their ore was of low-grade quality and would not be of much use to Vizag Steel Plant.
In support of his revival proposal, he said while Rashtriya Ispat Nigam Limited (RINL) holds 51 per cent shares, the remaining are held by LIC, Central government and Odisha Mining Corporation. He reiterated that apart from getting captive mines, VSP’s loans could be converted into equity of the respective organisations. The interest burden would then come down and the plant will not need to repay `3,000 crore, he stated.
Jagan Mohan Reddy said to prevent further losses owing to interest, RINL — the formal title of VSP, could be listed on the stock exchange, post which banks will have the exit option through sale of their shares. He recounted that RINL has `12,000 crore long-term loans and another `10,000 crore loan was taken as working capital. These could be further converted into long-term loans. Another option is to go for public issue, he explained.
“All these issues and suggestions have been mentioned in my letter to Prime Minister,’’ Jagan Mohan Reddy told the JAC leaders. He regretted that some senior political leaders are alleging that no letter has been sent to the Prime Minister. May be the acknowledgement letter has not been sent to these leaders, he remarked.
The Chief Minister suggested another option. RINL has 20,000 acres of land of which around 7,000 acres remains unused. These lands could be converted into house plots and sold by RINL to mobilise funds for VSP. “AP government will not object to such land conversion,” he underlined.
On his meeting POSCO representatives, Jagan Mohan Reddy said he had indeed met them seeking their investments in Kadapa, Krishnapatnam and Bhavanapadu. “They are not serious about Vizag steel plant, he stated. He emphasised that the steel plant is not under the control of state government. Still, his government will pressurise the central government into dropping its idea of privatising VSP. “Our MPs will meet the Prime Minister to explain the seriousness of the issue. We will wait for the reply from PM office, basing on which we will pass a resolution in the budget session of AP Legislative Assembly,” he announced.