The Telugu Desam Party (TDP) on Friday urged the Centre to shelve its proposal to privatise Rashtriya Ispat Nigam Limited (RINL) — the corporate entity of Visakhapatnam Steel Plant.
The TDP’s move comes a day after the State unit of the Bharatiya Janata Party (BJP) too expressed its reservations over the Union government’s decision.
TDP Parliamentary floor leader in the Lok Sabha, Kinjarapu Ram Mohan Naidu, wrote letters to Union Finance Minister Nirmala Sitharaman in this regard on Friday.
“The oft-cited rationale for privatisation is that RINL has been reporting losses for some years now. But RINL was debt-free in 2011-12. It reported losses in the last four years due to huge interest payments to service debts that VSP has had to take on to fund its expansion plans for which the Centre did not invest fresh equity. The RINL had to rely heavily on a 10-year debt plan of ₹22,500 crore. The interest payments are eating into the earnings of RINL and the Centre is to be blamed for it,” he said.
“The RINL faces high iron ore costs, high freight costs, industrial power tariffs, high credit costs, import duties and cess on coking coal. Unlike private steel companies, VSP doesn’t have captive mines. VSP has to buy raw material from the market at higher prices. This leads to significant additional expenditure compared to other steel plants,” Mr. Ram Mohan Naidu said in the letter.
The MP questioned why a professionally-run public sector unit like VSP, whose products enjoy a good market reputation, is not being allocated captive mines. “Like the creation of a railway zone, allocating captive mines is just a matter of political will,” he wrote.
“Instead of privatising RINL, follow the example of former Prime Minister Sri Atal Bihari Vajpayee who worked towards reviving RINL and got loans converted into equity and preferential shares,” the MP said.
