₹11,440 Crore Revival Package Announced for Vizag Steel Plant
Hyderabad: In a significant development, the Centre on Friday announced a grand revival package for the crisis-ridden Visakhapatnam Steel Plant (VSP), which has a high emotional connect with the people of Andhra Pradesh.
As per the revival plan approved by the Prime Minister Narendra Modi-chaired Cabinet Committee on Economic Affairs for Rashtriya Ispat Nigam Limited (RINL), which operates the VSP, Rs 10,300 crore would be infused as equity capital and the Rs 1,140 crore working capital loan would be converted into cumulative preference share capital redeemable after 10 years.
The immediate impact of the package, according to financial experts, could be a clean slate in terms of working capital loan, enabling the RINL to raise fresh working capital and starting blast furnace operations.
“The revival plan envisages that RINL will start full production with two blast furnaces in January 2025 and with three blast furnaces August 2025,” said the Centre in an official press release.
On the political front, keeping their electoral promise, the National Democratic Alliance leaders, including Prime Minister Modi and Andhra Pradesh Chief Minister N. Chandrababu Naidu, did their best in showing a path for 25,000-odd employees to turnaround the steel maker. The TD has every reason to celebrate, as Naidu played a decisive role in getting the revival package.
“It is an emotional and proud moment for the people of Andhra Pradesh, as the Union government, in response to our consistent efforts since the formation of NDA government, has approved financial support of Rs 11,440 crore to revive the Vizag Steel Plant,” Naidu announced at a press conference in Vijayawada. “Today marks a historic moment for Andhra etched in steel,” he added.
With the opposition YSRC seeing in the package a conspiracy to privatise the steel plant, Union heavy industries minister H.D. Kumaraswamy reiterated that the Centre had no plans of privatising the VSP which he said had been put on revival path.
Discussing the economics of the Centre’s move, employees organisations and trade unions, while welcomed the package, maintained that viability could be achieved only through other strong measures like allocating captive ore mines and merging the entity with the Steel Authority of India Limited.
While the unions expressed doubts that the freshly-induced equity may be spent on settling dues to various vendors and employees, official sources said the RINL would be given leverage to stagger the repayment of dues and most of the amount would be utilised for the revival of the steel plant.
