Hyderabad: Extending Bharat Rashtra Samithi’s (BRS) support to the employees of Vizag Steel Plant, the party’s working president K.T. Rama Rao reiterated that BRS will resist the Central Government’s move to privatise the steel plant.
In an open letter to the Central government, KTR detailed the “evil plans” of Modi government to hand over the Vizag Steel Plant (VSP) to private players, the reasons behind the steel plant incurring losses, and the ways in which the plant could be revived.
KTR said that as part of the “conspiracy” to privatise the steel plant, VSP will be pushed into losses and the crisis will be shown as an excuse to hand it over to crony corporate companies.
The BRS leader claimed that the central government did not allow the special iron ore mines to the steel plant. Due to this, he said, the steel plant is forced to spend up to 60 per cent of its production cost on raw material. On the other hand, the cost of raw materials in private companies production is less than 40 per cent as iron ore, coal and other mines were allotted to them.
The BRS working president said that VSP, which is forced to spend huge amounts on raw materials, is facing challenges as it is competing with private corporate companies in the market in terms of production. It is facing losses as the enterprise has to sell at the same price as them in the market.
Minister KTR said that the enterprise is in distress as coking coal has to be imported, and iron raw materials needed for steel production are being bought at market rate from NMDC.
“Due to this, more than 50 per cent of production had to be stopped for a year. All of this is part of a conspiracy to push the Vizag Steel Plant into losses and use it as an excuse to privatise the steel plant. Prime Minister Modi has written off loans worth Rs 12.5 lakh crore for his corporate friends. Why is he not showing the same generosity on the Vizag steel plant?” KTR questioned.
Stating that an Expression of Interest (EoI) notification was issued in the garb of mobilising funds for working capital and raw materials, KTR said that the Modi government was indirectly attempting to handover the PSU to private entities through the notification. He demanded that the Centre should immediately cancel the EoI notification.
The minister in his letter laid out a detailed plan to revive the PSU. He said that Steel Authority of India Limited (SAIL) has already announced its expansion plans with a cost of around Rs 1 lakh crore. He said that the company can be merged with the Vizag Steel Plant, which has several advantages when compared to selling the steel plant to private companies at a low price. “This will contribute towards SAIL’s expansion goals. If the company moves in this direction, then an ecosystem can be created to fulfill a long standing demand of a steel factory in Bayyaram, Telangana and a steel plant in Kadapa,” said KTR.
Stating that VSP is not able to operate at its full capacity of 7.3 MTPA as the “Central government is not providing raw materials and capital”, BRS working president said that the enterprise which is working at 50 per cent of the capacity is incurring the same production cost it incurs for working at 100 per cent capacity.
He said that if the Centre extends support, the enterprise can work at full capacity which will help it in generating profits. He said that VSP can compete with private companies if the central government provides loans to it on par with private companies and facilitates provision of capital through banks.
Maintaining that the Centre should stop “conspiring” to privatise a PSU which has Rs 1.5 lakh crore worth assets, KTR demanded that the Modi government should extend Rs 5,000 crore financial assistance to the steel plant.
KTR reminded that earlier when the Vizag steel plant faced a financial crisis, Prime Ministers P. V. Narasimha Rao and Atal Bihari Vajpayee bailed out the PSU by extending financial support.
He also suggested the central government purchase steel from VSP for the large scale infrastructure projects in the country and pay the money in advance.
“The Vizag steel plant is allowed for loan monetisation up to Rs. 25,000 crores only. However, private companies having the same amount of assets as that of the Vizag Steel Plant are allowed to raise loans up to Rs 70,000 crore-Rs 80,000 crore,” he added.
BRS Working President KTR also directed the BRS AP unit President Thota Chandrashekar to extend solidarity to the workers of the steel plant. “Vizag steel is the right of Telugu people and the responsibility is on us to save the steel plant,” KTR remarked.
–IANS