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Committee Appeals to PM Modi to Halt Strategic Sale of Visakhapatnam Steel Plant

The Visakha Ukku Parirakshana Porata Committee (VUPPC) has made an appeal to Prime Minister Narendra Modi, urging him to reconsider the decision of a complete strategic sale of RINL-Visakhapatnam Steel Plant (VSP). The committee emphasizes that withdrawing this decision is crucial for the plant’s future.

The VUPPC’s chairmen, namely D. Adinarayana, Ch. Narasinga Rao, and Mantri Rajasekhar, presented a memorandum to Steel Secretary Nagendra Nath Sinha during his recent visit to Visakhapatnam Steel Plant. They highlighted that the plant’s current capacity is 7.3 million tonnes per annum, but it’s being limited to about half of its capacity due to perceived high input costs attributed to the lack of captive iron ore mines. This, they argue, has contributed to increased losses since the decision for the 100% strategic sale was taken in 2021.

The committee asserts that continuing with the current strategy of limiting the plant’s production will lead to further losses. Stressing that expanding production is the key to reducing production costs, they pointed out historical instances, such as during 1998-2001, when with the support of both the Central and State governments, the plant’s capacity utilization surpassed 100%, leading to lowered production costs and profitable operation from October 2001.

VUPPC leaders also propose additional measures to support the plant’s stability and growth. They appealed to the Prime Minister to convert loans and interests into share capital by the Indian Government, grant a three-year tax holiday, extend financial assistance for working capital until the plant stabilizes, and provide captive mines or raw materials from SAIL and NMDC on a cost-to-cost basis to operate the plant at its maximum capacity.

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