Govt move to merge RINL and SAIL seen hurting Vizag steel plant workers
30 Sep 2024
The government’s move to save debt-laden Rashtriya Ispat Nigam Ltd (RINL) from certain collapse by merging it with Steel Authority of India (SAIL) Ltd seems to be taking a toll on the Vizag plant’s employees.
At least 4,000 contract workers at the Vizag Steel Plant (VSP) are reported to have their gate passes cancelled by the management on Friday amidst talks of revival of the state-owned steel maker.
Although the workers were later allowed inside following protests, RINL employee see this as part of a strategy to effect closure of the plant.
The management is also reported to be looking for ways to reduce workforce ahead of a likely merger with SAIL.
Trade unions have demanded that the steel ministry make an official announcement on the merger plan so that the management’s moves become more transparent.
They also allege that the so-called merger plan is a cover for closure of the plant and that the cancellation of gate passes of contract workers is a part of this move.
They also cite the instance of a proposal to send 500 employees of RINL to Nagarnar plant of NMDC in Chhattisgarh.
While a merger with SAIL is one of the options under the consideration of the steel ministry, other options like injecting fresh capital, privatization through a sale of assets, monetizing some assets through sale of a land parcel of 1,500-2,000 acre to NMDC for a pellet plant are also under the consideration of the steel ministry, say reports.
RINL, which operates a 7.5 million tonne steel plant at Visakhapatnam in Andhra Pradesh, is India's first shore-based integrated steel plant.
However, being a store-based steel plant, RINL does not have a captive iron ore mine or a coal mine and this is cited as the main reason for the crisis.
Also, two of VSP’s three blast furnaces are now closed.
RINL registered a loss of Rs2,859 crore in FY 2022-23 and accumulated debt to the tune of Rs20,400 crore, forcing the company to default on loans worth Rs410.5 crore as of June.