Modi conspiring to hand over VSP to his friends: KTR
Hyderabad: BRS working president and IT minister K.T. Rama Rao on Sunday demanded the BJP-led government at the Centre to stop moves to privatise Vizag Steel Plant (VSP), which has assets worth Rs 1.5 lakh crore. Instead the Centre would do well if it extends Rs 5,000 crore financial assistance to the steel plant. He directed the BRS AP unit president Thota Chandrashekar to extend solidarity with workers of the steel plant.
“Vizag steel is the right of Telugu people and the responsibility is on us to save the steel plant,” he remarked.
In an open letter to the Centre, Rao reiterated that BRS will resist the central government’s move to privatise the steel plant. He pointed out the ‘evil plans’ of the Narendra Modi government to hand over VSP to private players and the reasons for the steel plant incurring losses.
The minister alleged 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. He said that the central government did not allow the special iron ore mines to the steel plant thereby forcing the steel plant 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 was less than 40% as iron ore, coal and other mines were allotted to them. He said that VSP is facing challenges as it is competing with private corporate companies in terms of production. It is facing losses as the enterprise has to sell at prices similar to them.
Rao said that the enterprise was in distress as coking coal had to be imported and iron raw materials needed for steel production were being bought at market rates 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 VSP into losses and use it as an excuse to privatise the steel plant. Modi has written off loans worth `12.5 lakh crore for his corporate friends. Why is he not showing the same generosity towards VSP?” he questioned.
Stating that an Expression of Interest (EoI) notification was issued in the garb of mobilising funds for working capital and raw materials, Rao 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 laid out a detailed plan to revive the PSU. He said that the Steel Authority of India Limited (SAIL) has already announced its expansion plans at a cost of around `one lakh crore. He said that the company can be merged with the VSP, 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 and a steel plant in Kadapa,” he said.
Stating that VSP is not able to operate at its full capacity of 7.3 MTPA as the Centre was not providing raw materials and capital, Rao said that the enterprise, which was working at 50% of the capacity, is incurring the same production cost it would incur 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 earn profits. The minister said that VSP can compete with private companies if the Centre provides loans on par with private companies apart from facilitating capital through banks.
He recalled that earlier when the VSP faced a financial crisis, the then prime ministers P.V. Narasimha Rao and Atal Bihari Vajpayee bailed out the PSU by extending financial support. He also suggested the Centre purchase steel from VSP for large scale infrastructure projects and pay the money in advance.
“The VSP is allowed for loan monetisation up to Rs 25,000 crore only. However, private companies having the same lumber of assets are allowed to raise loans up to Rs 70,000 crore to Rs 80,000 crore,” he said.
