To
Smt Nirmala Sitharaman
Union Finance Minister
Dear Smt Sitharaman,
The way your government has been dealing with the fate of RINL (Visakha Steel Plant), creating an adversarial environment for handing over its highly valuable assets and manpower to a private company for a song, raises questions about the intent underlying the government’s policy of privatisation of the CPSEs and its likely adverse impact on the national interest.
In this connection, I refer to my letter of 23rd June, 2024 addressed to Shri H D Kumara Swamy, Union Steel Minister on government’s misplaced policy on disinvestment in general and the proposed privatisation of RINL in particular (https://countercurrents.org/2024/06/welcoming-the-revival-of-hmt-instead-of-disinvesting-cpses-they-need-to-be-supported-and-empowered-beml-rinl-are-examples/).
I have extracted below the relevant para on RINL from the above cited letter.
“RINL could have been supported financially from the Central budget to revive one of its blast furnaces but, instead, the Centre forced it to outsource it to a private company, though the same NDA government has had no hesitation whatsoever in announcing a massive subsidy of Rs 2,00,000 crores over five years to profit-earning private companies in the guise of the so-called PLI scheme, as a part of which it recently agreed to provide more than Rs 13,000 crores subsidy to a US company, Micron, to set up a semiconductor unit in Gujarat! While CPSEs like BEML and RINL have created vast employment opportunities and promoted self-reliance, the PLI scheme is an open-ended one without any requirement of the beneficiary companies generating employment and net domestic value addition“
In my view, reviving a CPSE steel giant like RINL will uphold the national interest far more than providing a subsidy of Rs 13,000 Crores to Micron, a profit-earning US company.
It is ironic that your government should prefer deliberately weakening a CPSE like RINL, paving the way for under-selling it to a private company, rather than strengthening it and enabling it to fulfill the National Steel Policy by becoming a global champion in steel. Had your government allotted one or two captive iron ore blocks to RINL, provided it logical support in getting iron ore and coke and extended adequate financial liquidity support, it would have competed with its counterparts, both domestic and global.
Is it not ironic that your government should permit high-quality iron ore to be exported to China and depend on that country for finished steel products, while RINL is nonchalantly allowed to bleed?
Is it not equally ironic that your government should allot more than ten iron ore blocks to one private company but deny even a single block to RINL?
The latest news about RINL is truly disturbing.
Weakened financially as a result of the deliberate policy of your government, RINL is unable to repay its loans to CPSE banks (https://m.economictimes.com/industry/indl-goods/svs/steel/vizag-steel-plant-misses-payment-lenders-look-for-cover/articleshow/112086093.cms). On the other hand, there have been instances when CPSE banks were made to over-stretch their finances to accommodate highly indebted, defaulting private oligarchs. There seems to be one set of rules in the government for big businesses and another for CPSEs!
Even at this belated hour, I request your Ministry, in consultation with the Steel Ministry, work out a comprehensive revival plan for RINL and do everything urgently to revive the Visakhapatnam Steel Plant, respecting the sentiments of the people of Andhra Pradesh in general and the people of north Andhra in particular.
Failing to do it will amount to letting down the people of Andhra Pradesh.
Regards,
Yours sincerely,
E A S Sarma
Former Secretary to the Government of India
Visakhapatnam
