The Rashtriya Ispat Nigam Limited’s integrated steel plant at Visakhapatnam city is called the Visakhapatnam Steel Plant. Having been established in 1982, the facility produces value-added steel. In the fiscal year 2021–2022, it produced 5.138 million tonnes of saleable steel, 5.272 million tonnes of crude steel, and 5.773 million tonnes of hot metal. The India Daily Times reports that the plant’s output is anticipated to soar in the near future.It’s a sector.
History
The Indian Prime Minister, Indira Gandhi, declared on April 17, 1970, that the government had decided to build a steel mill in Visakhapatnam. A redesigned idea emerged a few years later with the aid of the government of the former USSR. In November 1980, a thorough project study for a 3.4 Mtpa facility was created, and in February 1981, a contract was signed with the USSR for the preparation of working drawings for the blast furnace, sinter plant, and coke ovens. January 1982 saw the laying of the blast furnace foundation and the initial bulk concreting. At the same time, work on the nearby township’s building began.
Situated on 33,000 acres (13,000 hectares), Vizag Steel Plant is the only shore-based steel plant in India. It has the capacity to produce up to 20 MT within a single campus. In 2011–2012, there was Rs 14,457 crores in revenue. At a cost of Rs. 8,692 crores, Prime Minister Manmohan Singh initiated the expansion of the Vizag Steel Plant on May 20, 2009, increasing its capacity from 3.6 MT to 6.3 MT. However, the investment was reclassified as follows, coming in at 14,489 crores:
The amount spent for the 2009–10 fiscal year was Rs 1840 crores.
The project has cost Rs 5883 crores since its beginning.
As of March 25, 2010, the total commitment was Rs 11591 crores, which included enabling works, steel purchase, consultation, spares, etc.
What actually led to losses and decline of Vizag Steel Plant?
V. Vijayasai Reddy, a member of the ruling party in the Rajya Sabha, claims that the management transferred Rs 2,000 crore to a wheel manufacturing facility in Raebareli, Uttar Pradesh. In 2010, Orissa Mineral Development Corporation received an additional investment of Rs 361 crore. This investment yielded no returns for the company, and it also required payment of a penalty of Rs 1,000 crore due to irregularities in the deal.
During an all-praty meeting in the city to design the future program to guarantee Vizag Steel Plant in the public sector, Reddy said that a plant officer had embezzled large sums of money in a massive scandal involving Rs 2,000 crore, and the government had done nothing at the time.
To avoid the Vizag Steel Plant from being privatized, Vijayasai is meeting with prominent members of the national government on Friday in New Delhi, including Union Home Minister Amit Shah. The YSRCP leader declared, “We as a delegation of MPs will also meet Prime Minister Narendra Modi to save Vizag Steel Plant”.
What CM Jagan Mohan Reddy argues with the Centre?
Chief Minister of AP, YS Jagan Mohan Reddy, stated in a lengthy letter to Prime Minister Narendra Modi earlier this week that the plant performed well from 2002 to 2015, turning a profit and having a positive net worth. Despite being labeled as a sick unit by BIFR, the facility managed to turn things around in 2002 and performed well up until 2015. In 2019, it raised its capacity to 7.3 MT.
Currently, the corporation controls about 19,700 acres of land, with a potential valuation of one lakh crore rupees because of the plant’s location in an urban region and the fast-growing urban sprawl. According to Jagan Reddy, Vizag Steel Plant which employs close to 18,000 people began turning a profit of around Rs 200 crore every month in December 2020. He noted that extending this performance for an additional two years would significantly improve the financial position and asked the Center to rethink its choice to privatize the steel plan.
Centre promises
The long-standing controversy surrounding the recent privatization of the Vizag Steel Plant and the earlier announcement that two of the plant’s three blast furnaces had been shut down. Trade unions have responded by requesting financial assistance to resurrect the Steel Plant. Telugu Desam Party (TDP) MP M Sribharat announced at a news conference on September 20, 2024, that the Center is providing Rs 500 crore in urgent aid for the resuscitation of the Vizag Steel Plant.
Visakhapatnam Steel Plant
The Ministry of Steel has committed to providing an extra Rs 2,500 crores to restart the two blast furnaces, bringing the plant’s output up to full capacity by November, according to the most recent information. Trade unions and employees have been worried about the state of the facility since Rashtriya Ispat Nigam Ltd (RINL), which is in charge of it, is going through a serious financial crisis. On September 15, trade unions and left-leaning parties organized a Maha Dharna as part of the protest.
Despite the Center’s pledge to release Rs 2,500 crore, opposition lawmakers and trade unions have expressed skepticism over the already sanctioned amount of Rs 500 crore, claiming that it is insufficient. V Srinivasa Rao, State Secretary of the CPM, stated, “If the state is serious about protecting the steel plant, they need to come up with a proper plan and pressure the Central government at least a sum of Rs 1500 crore.”
He went on to cast doubt on the Central government’s dedication to the country’s economic development, saying, “The PM pledged during his third term to turn India into a powerhouse by 2047. However, if the Visakhapatnam Steel Plant crashes, can India grow into a superpower? Without industries, agriculture, or stable economic conditions, how can we attain “Vikasith Bharth”?
Srinivas Rao underlined that the TDP-BJP-Janasena government is in charge of the Vizag Steel Plant’s future. With support from the central government, banks will then step up and contribute money, or the hassle-free way to save the plant is to integrate it under SAIL (Steel Authority of India Ltd).
Conclusion:
Due to a serious coal shortage, the Vizag Steel Plant closed Blast Furnace-3, Annapurna, on August 12. There were three blast furnaces, but only one is in use today. According to reports, the plant’s daily production rate decreased from 21,000 tonnes to 4.5 tonnes. Four months have passed since the employees’ last paycheck, and the supply of coal and iron ore has been affected.