Centre's VSP privatisation move: Workers intensify agitation; ruling YSRCP faces political heat

Protests have intensified in Visakhapatnam and the state politics heated up, following the Centre's declaration in Parliament that it would go ahead with privatisation of the Vizag Steel Plant.

On Monday, replying to a question from Andhra Pradesh MPs in the Lok Sabha, finance minister Nirmala Sitharaman confirmed that the Cabinet Committee of Economic Affairs (CCEA) has accorded ‘in-principle’ approval for 100 percent disinvestment of Government of India (GOI) shareholding in Rashtriya Ispat Nigam Limited, “along with stake in its subsidiaries/joint ventures through strategic disinvestment by way of privatization.”

RINL is the corporate entity of the Visakhapatnam Steel Plant also popularly known as Vizag Steel.

The centre's announcement further agitated workers and locals of the steel city, where protests are on since last month.

Soon after the FM's statement, VSP workers erupted in anger and blocked the Kolkata-Chennai national highway 16 at Kurmannapalem, where the 7.3-million-tonnes-per-annum capacity plant is located.

On Monday, workers held a protest meeting at the RINL administrative building and detained director (finance) Venu Gopal Rao for a few hours.

A statewide bandh, supported by all the parties except the BJP, was observed on Friday opposing the plan.

Despite such widespread public anger and opposition from the Andhra Pradesh government, the centre said that the “strategic disinvestment will lead to infusion of capital for optimum utilisation, expansion of capacity, infusion of technology and better management practices.”

The main opposition TDP blamed the Reddy government for “failing to stop the privatisation.” Workers, besides the TDP, are demanding the resignation of the elected representatives to send a strong message to the centre.

Faced with the public anger and political heat, Chief Minister Jaganmohan Reddy on Tuesday shot off a missive to Prime Minister Narendra Modi requesting an appointment for him to explain the options to revive the plant. The CM also sought to lead an all-party delegation to the PM.

“I can emphatically say that VSP will again become a profitable venture given some support from the Government of India by implementing some turnaround measures such as allotting captive iron ore mines to bring down the input costs, swapping high cost debt with low cost debt, converting debt into equity through equity conversion and monetization of the vacant land,” the CM listed the alternatives to disinvestment, in reiteration of the submissions he made in his 6 February letter to the PM on the issue.

The FM on Monday stated that “the state government does not have any equity in RINL.”

“(Disinvestment) will result in higher production and productivity and expansion of direct and indirect employment opportunities. While deciding the terms and conditions of the strategic sale, legitimate concerns of the existing employees and other stakeholders are suitably addressed through appropriate provisions made in the Share Purchase Agreement,” Sitharaman said.