HYDERABAD: Extending support to the employees of Vizag Steel Plant (VSP), BRS working president and Telangana IT minister KT Rama Rao on Sunday reiterated the pink party’s stand that it would resist the Union government’s move to privatise the PSU.
Asking BRS AP unit president Thota Chandrasekhar to extend solidarity to the steel plant workers, KTR said, “VSP is the right of Telugu people, and the responsibility is on us to save the plant.”
In an open letter to the Union government, KTR said that as part of the conspiracy to privatise the steel plant, VSP would be pushed into losses, and the government would use the crisis as an excuse to hand it over to crony capitalists. Accusing the Centre of failing to allocate dedicated iron ore mines to VSP, he said this forced the steel plant to spend up to 60% of its production cost on raw materials.
“On the other hand, the cost of raw material in private companies was less than 40% as iron ore, coal, and other mines were allotted to them,” he observed and added the VSP was facing challenges as it was competing with private companies in the market in terms of production. “The plant is facing losses as it has to sell at the same price as them in the market,” KTR explained.
He said the enterprise was in distress as coking coal had to be imported, and iron, the raw material required to produce steel, was being bought at a market rate from NMDC.
“Due to this, more than 50% of production had to be stopped for a year. All of this is part of a conspiracy to push the VSP into losses and use it as an excuse to privatise the plant. Prime Minister Narendra Modi has written off loans worth `12.5 lakh crore of his friends in the corporate sector. Why is he not showing the same generosity to the VSP?” Rama Rao asked.
He said that SAIL had already announced its expansion plans with an outlay of around `1 lakh crore.
“The company (SAIL) can be merged with the VSP. This would have several advantages compared to selling the steel plant to private companies at a low price. A merger will contribute towards SAIL’s expansion goals. If the company moves in this direction, then an ecosystem can be created to fulfil a longstanding demand for a steel factory in Bayyaram, Telangana, and a steel plant in Kadapa,” Rama Rao opined.
“The Vizag Steel Plant is allowed loan monetisation of up to `25,000 crore only. However, private companies are allowed to raise loans up to `70,000 crore to `80,000 crore,” Rama Rao pointed out.