CITU State president Ch. Narsinga Rao on Monday alleged that there was a conspiracy by the Centre and the State government to privatise the Rashtriya Ispat Nigam Limited, corporate entity of Visakhapatnam Steel Plant, and demanded capital restructuring programme to bail it out in the larger public interest.
Addressing the media along with CITU-affiliated Steel Plant Employees’ Union (SPEU) president J. Ayodhyaram and general secretary Y.T. Dasu, he said here on Monday the net losses of RINL were expected to cross ₹3,200 by end of current financial year. This includes losses incurred in the last two years.
He said RINL was spending ₹9,000 crore to expand capacity to 7.3 million tonne and augment water storage facilities at a time when the steel industry was hit by slump. He said RINL was facing heavy interest burden as loans had crossed₹15,000 crore. Stating that RINL had not incurred any operational loss, he said the public sector company with head office in the city had earned a record profit of ₹2,200 crore in 2008. For expanding capacity to 6.3 million tonne, the company had already spent ₹12,500 crore, he stated.
Mr. Rao said capital restructuring if approved by the Centre would make the position viable for RINL and pointed out how for SAIL plants at Bhillai and Bokaro the Union Government had granted funds for carrying out expansion projects. He said while denying monetary support to RINL, the Centre had also deprived it of captive mines forcing it to spend heavy amounts on procuring raw material.
He said for projects like South Korea’s POSCO and Brahmani in Kadapa, which had not taken off, the governments concerned in Odisha and Andhra Pradesh (before bifurcation) had sanctioned captive mines adding there was no justification over denial of raw material security to RINL.
The CITU leader said due to austerity measures observed by the management of RINL, not a single new post was created for 6.3 million tonne expansion of the steel plant.
Only 3,200 posts which fell vacant due to retirement or death had been filled while ignoring the requirement for new posts in the expanded units.