Centre approves Rs 11,440 crore RINL revival plan in big win for coalition partners in Andhra Pradesh

Hyderabad: The Centre's announcement of a financial package for the revival of the struggling RINL has come as a major relief to not only the thousands of workers but also NDA coalition partners in Andhra Pradesh, TDP, and Jana Sena.

It is being seen as a huge win for NDA partners in the state. During the last year general elections, the issue of disinvestment in the Visakhapatnam Steel Plant (VSP) had become a major poll plank in the Vizag region.

The TDP-led NDA alliance assured that if voted to power, the Vizag steel plant will be revived and protected from going under the hammer. The opposition YSRCP, after the elections, often used the VSP issue to attack the TDP-led NDA government in the state, whereas the TDP gave it back, stating the YSRCP government between 2019 and 2024 could not get the Centre to work on the revival of RINL.

Revival of RINL has always been on the priority list whenever Chief Minister N Chandrababu Naidu went to Delhi to meet union ministers and the Prime Minister Narendra Modi.

Naidu had requested earlier that the government of India identify ways to support RINL and ensure the sustainability of its operations and effective capacity utilization.

It was on January 27, 2021, that the Cabinet Committee of Economic Affairs (CCEA) gave in-principle approval for 100 per cent strategic disinvestment of the Government of India's shareholding in RINL, along with management control by way of privatisation. This has triggered an uproar among several quarters.

Demanding the Centre to roll back its call, thousands of Visakhapatnam Steel Plant employees have been protesting since then.

The then-YSRCP government at the time also passed a unanimous resolution against the disinvestment in the Assembly and sent it to the Centre.

Soon after Union minister Ashwini Vaishnaw announced the RINL revival package on Friday, an elated Naidu called it a historic moment and thanked Prime Minister Narendra Modi and Union ministers Nirmala Sitharaman and H D Kumaraswamy. He added good days are ahead for Andhra Pradesh.

“Today marks a historic moment etched in steel. It is an emotional and proud moment for the people of Andhra Pradesh, as the Union Government, in response to GoAP's consistent efforts since the formation of the NDA Government, has approved financial support of Rs 11,440 crore to revive the Vizag Steel Plant. I extend my heartfelt gratitude to the Prime Minister, Narendra Modi, for his unwavering support of the steel plant, which I assure you will contribute to the PM’s vision of nation building as part of Viksit Bharat—Viksit Andhra. Special thanks to Finance Minister Nirmala Sitharaman and Union Steel Minister HD Kumaraswamy for their constant support and positive response. The Vizag Steel Plant is more than just a factory—it stands as a monument to the struggles and spirit of the people of Andhra Pradesh, holding a special place in the hearts of all, especially the people of Vizag. This was not merely an election promise; it was a deeply personal commitment we were determined to honour. Good days ahead for Andhra Pradesh,” said Naidu.

Due to a shortage of raw materials and cash flow issues, only one of VSP's three blast furnaces has been operational since September last year. The plant is currently operating at 1.25 to 1.3 million tonnes of its total capacity of 7.3 million tonnes.

RINL's overall debt is estimated to be around Rs 35,000 crore, and SBI is the highest lender, with an exposure of around Rs 10,500 crore. It is learnt that with the revival package, payments will be first made to the lenders so that the PSU will not slip into the NPA category.

VSP is the only shore-based integrated steel plant in the country, with two major ports within 25 km of it.

The plant expanded its capacity from 3 million metric tonnes to 7.3 million metric tonnes as per the National Steel Policy and is the single-largest public sector unit (PSU) in the steel industry.