The state government passed a resolution in the Legislative Assembly on Thursday against the decision of the Cabinet Committee on Economics to remove the entire stake of the Union government in Rashtriya Ispat Nigam Ltd. (Visakhapatnam Steel Mill) together with the control of the management through privatization to disinvest and seek the support of the Indian government for the RINL for a turnaround.
In the resolution of the Minister of Industry and Commerce, Mekapati Goutham Reddy, it was mentioned that, taking into account the sensitivity of the issue, the state government recognized the need to support the cause of RINL. Accordingly, Prime Minister YS Jagan Mohan Reddy had written a letter to the Prime Minister asking them to reconsider the divestment proposal and suggesting alternative solutions that could help RINL become a profitable business.
The government noted that the British American Steel Works for India Consortium (BASIC) recommended the construction of the Visakhapatnam steel mill in the 1960s. However, the facility could only be built after violent unrest caused by the fasting of T. Amruta Rao from the Gandhi mission from Guntur. 32 people were killed in the process, until the sanction for the construction of the facility was announced by the then Prime Minister in 1970.
According to a report from the Ministry of Steel, RINL had an excellent layout, infrastructure including land, and a large skilled workforce, so that capacity could be expanded to up to 20 million tons of liquid steel per year. The company suffered £ 4,982 billion in losses through 2001/02 and the capital restructuring was undertaken by the Government of India in 1993 and 1998 through the conversion of its loans into equity and preferred share capital.
RINL exceeded the nominal capacity in the years 2001 to 2002 and achieved a turnaround in the years 2002 to 2003. It had a peak occupancy rate of 120% from 2005 to 2006 and a peak after-tax profit of £ 2,008 billion from 2004 to 2005. It made steady profits for 13 years through 2014-15 and totaled nearly £ 12,958 crore.
While giving a detailed look into the history of RINL, suggesting ways to get it back on track, and mentioning its significant contribution to the supply of liquid medical oxygen needed to fight the COVID pandemic, the state government expressed strong reservations about it the sale of RINL the centre’s stake in RINL and determination to expand its support for the protection of the “Jewel of AP”