AP CM Jagan Reddy write to PM Modi, urges to reconsider disinvestment of Vizag steel plant

Andhra Presh Chief Minister YS Jagan Mohan Reddy has written a letter to Prime Minister Narendra Modi requesting Government of India to reconsider its plan of disinvestment of Visakhapatnam Steel Plant. Cabinet Committee on Ecomic Affairs (CCEA) has given approval for 100% strategic disinvestment of Rashtriya Ispat Nigam Limited (RINL) including giving up of manment control by way of privatisation. RINL is Corporate entity of Visakhapatnam Steel Plant Ltd.

While urging prime minister to reconsider disinvestment plan, Andhra CM also suggested immediate measures to opt in order to strengn viability of plant.

"Sir, I can emphatically say that plant will again become a profitable venture given some support from Government of India inste of taking disinvestment route," Jagan Reddy said in letter to PM as he laid down suggestive measures for Union Government.

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Measures suggested by Jagan Reddy:

Continuing Operations to achieve turn around

While stating that steel sector is also witnessing a V-shaped recovery like all or sectors, Andhra CM highlighted that RINL has achieved highest ever capacity utilisation of 6.3 MTPA against capacity of 7.3 MTPA from December 2020 and started making a monthly profit of close to Rs 200 crore. CM ded that continuing this performance for a furr period of two years will help financial situation immensely.

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Allotment of a Captive Iron Ore to plant

Contending absence of captive iron ore mine for Visakhapatnam Steel Plant as one of significant reasons of losses, CM called for allotment of captive iron ore mines for steel plant while saying that move will help tide over cost disvant which Visakhapatnam Steel Plant faces as against competitors. Jagan Reddy pointed out that many of competitors have captive mines for more than 60% of ir requirement.

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 Financial restructuring

CM suggested converting short term and long term loans into equity to reduce pressure of repayment of loans and interest burden. He pointed out that company was bearing interest rate as high as 14% on a high-cost debt to tune of Rs 22,000 crore. He opined that option of converting loans to equity and listing in stock markets could be explored.

" Steel Plant stands as a testimony to will of Telugu people and it is continued as an icon of Telugu achievement in our collective psyche till date. GoAP is willing to work with Ministry of Steel to protect this jewel of Andhra Presh," letter re.

Visakhapatnam Steel Plant is largest public-sector industrial unit in state creating employment opportunities for close to 20,000 people directly and or indirect employment opportunities in city of Visakhapatnam. It is India's first shore-based integrated steel plant,  Andhra CM said as he expressed his assurance to work in tandem with Union Government to "revive plant for unlocking greater value to society and in particular to people of Andhra Presh."

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