Staff cheer VSP revival package but seek a permanent solution

Revival package of ₹11,440 crore for RINL brings temporary relief, but permanent solution hinges on iron ore mines.

Sumit Bhattacharjee

The Union government’s revival package of ₹11,440 crore to the ailing Rashtriya Ispat Nigam Limited (RINL), the corporate entity of the Visakhapatnam Steel Plant, might have brought smiles back on the faces of its employees, but it may not be a permanent solution to the largest shore-based integrated steel maker.

Announcing the package at New Delhi on Friday, Railway Minister Ashwini Vaishnaw said that Prime Minister Narendra Modi had taken the decision at the Union Cabinet’s CCEA (Cabinet Committee on Economic Affairs) meeting, held on Thursday night.

Union Steel Minister H.D. Kumaraswamy said that Mr. Modi had approved the revival plan for RINL for a total of ₹11,440 crore, which included infusion of ₹10,300 crore as equity capital and conversion of ₹1,140 crore working capital loan as 7% Non-cumulative Preference Share Capital redeemable after 10 years to keep RINL as a going concern.

Union Minister for Civil Aviation K. Rammohan Naidu said that the equity infusion of ₹10,300 crore into RINL would help it overcome the operational problems related to raising working capital and start the blast furnace operations in the most productive way. This would allow the company to gradually reach its full production capacity which was critical. The decision was in the national interest to have stability in the Indian steel market by augmenting steel production besides saving the livelihoods of employees (regular and contractual) and those dependent on the operations of the steel plant.

The revival plan envisaged that RINL would start full production with two blast furnaces in January 2025 and all the three blast furnaces becoming operational by August 2025.

According to Mr. Vaishnaw, Mr. Modi had expressed the view that RINL would play a vital role in the nation’s Atmanirbhar Bharat vision.