Centre chickens out on privatising VSP, thanks to pressure mounters by KTR, Telangana Govt

HYDERABAD: Thanks to the pressure mounted and amplified by Bharat Rashtra Samithi working president and Industries Minister K T Rama Rao and the decision of Telangana Chief Minister K Chandrashekar Rao (KCR) to participate in bidding for the Expression of Interest called for by the Rashtriya Ispat Nigam Ltd (RINL), the Union Minister of State for Steel Faggan Singh Kulaste said in Visakhapatnam on Thursday that the Centre was not going forward with the privatisation plan of Visakhapatnam Steel Plant (VSP).

He announced that the Government of India was not going forward with privatisation of RINL. Instead, the Government was going to explore all the possibilities to strengthen the company.

A huge public outcry from different sections of the society erupted demanding the rollback of the move to privatise the steel plant. The BRS and Telangana Government assumed an aggressive posture in this battle, while the Andhra Pradesh Government led by YS Jagan Mohan Reddy of the YSR Congress tried to express its ‘opposition’ in a tongue-in-cheek manner that wouldn’t rub its secret ally, the BJP, and the Centre on the wrong.

It was KTR who was vociferous in his trenchant attack against the Centre and led the battle from the front.

In fact, Union Minister Kulaste arrived in Vizag to discuss with the management of the RINL and several unions and stakeholders in the steel plant. The RINL has a long history of agitations and sacrifices of Telugu people to which the Centre yielded ground and set up the Vizag Steel Plant. Kulaste would review the situation.

It may be recalled that KTR raised his voice against the move to privatise the steel plant by dashing off a missive to the Union Government a week ago. He followed it up promptly with a detailed press conference where he had explained the nexus between Narendra Modi Government and Gautham Adani.

He had explained how the Government of India wanted to let the Adani Group and POSCO steels to exploit the huge reserves of iron ore reserves in Bailadila mines in Chhattisgarh. He also said that the Centre had conveniently junked the proposed Bayyaram Steel Plant which was promised to Telangana as part of the Andhra Pradesh Reorganisation Act 2014. If the ore in Bayyaram was not suitable for producing steel, a slurry pipeline could be laid from Bailadila to Bayyaram which were at distance of just 160 km.

The Centre could have allotted dedicated mines for the RINL to make the blast furnaces in VSP up and running. Visakhapatnam Steel Plant was about 600 km away from Bailadila iron ore mines. Instead, the Centre chose to privatise the Navaratna company by calling for expression of interest for either the supply of raw material or providing of working capital in exchange of steel produced by the plant.

However, there is an important clause tucked in the fine print that once the bidder was chosen, the terms and conditions could be written on “mutually agreed” rules. This naturally lets, the VSP eventually slip into the hands of private players. The VSP is spread in 19,800 acres of land and the steel plant and support infrastructure is located in 11,000 acres, while 9,800 acres is still available. What would be the fate of this is anybody’s guess.

In fact, KTR said that the Modi-led Government was killing “two birds - Bayyaram & VSP - at one shot” just to favour his “IshtaRatnas” - Adani and Ambani -- by letting the PSUs slip into their hands. Bailadila mines have a reserve of 134 crore metric tonnes of iron ore worth Rs. 6 lakh crore. KTR said that it was the national wealth.

He had also demanded that the contract given to Adasni-POSCO joint venture, Mundra Steels, be cancelled and the prospecting license to exploit the ore be given to the RINL and Bayyaram.

With a view to demonstrate its genuineness, the Telangana Government sent a team of three director of Singareni Collieries Company Ltd to study the scope for participating in the bids for the EoI of the VSP.