HYDERABAD: The Telangana government has announced its intention to submit an expression of interest (EoI) for the acquisition of Rashtriya Ispat Nigam, commonly referred to as Visakhapatnam Steel Plant (VSP), located in Andhra Pradesh. The deadline for submission of the EoI is April 15 at 3 pm. Sources said the State government has decided in principle to proceed with the submission of the EoI.
The ruling Bharat Rashtra Samithi (BRS) has been vocal in its opposition to the privatisation of Public Sector Undertakings (PSUs) by the Prime Minister Narendra Modi-led government, particularly the proposed privatisation of VSP in the neighbouring State of Andhra Pradesh.
Sources have revealed that officials from the Telangana government are planning to visit the VSP in the next few days. The Singareni Collieries Company Limited (SCCL), in which Telangana holds a 51 per cent stake, and the Telangana State Mineral Development Corporation (TSMDC), are both being considered as potential entities to submit the EoI for the steel plant, according to the sources.
It is worth noting that on March 27, the Union government invited EoIs from private companies and steel manufacturers to provide working capital and purchase the products of the VSP. However, BRS leaders saw this EoI as the first step towards privatising the plant.
Telangana IT & Industries Minister KT Rama Rao has already written an open letter to the Centre urging them not to privatise the VSP. His plea has received tremendous support from the employees of VSP as well.
Against this backdrop, the Telangana government has decided to submit an EoI for the VSP also procure its products for infrastructure projects in the State. Sources have indicated that Chief Minister K Chandrasekhar Rao recently held a meeting with officials to discuss the VSP and instructed them to proceed with the submission of the EoI.
As a result, higher officials from Telangana are expected to travel to Visakhapatnam in the next one or two days to review the conditions set out for the EoI, the products of the VSP, and other financial considerations.
Through this decision to submit the EoI, the BRS aims to convey a clear message across the country that it opposes the privatisation of PSUs and the policies of the Modi government. It is also expected to help the BRS expand its reach in other States.
It is worth recalling that recently, former joint director of the CBI, VV Lakshminarayana, took to Twitter to say that either the AP or Telangana government should submit the EoI for VSP. However, as of now, the AP government has only requested the Centre not to privatise the VSP and has no plans to submit the EoI. The BRS government’s decision to submit the EoI may help it expand its base in AP, but it could also put the YS Jagan Mohan Reddy-led government in an awkward position.
While the VSP is a loss-making plant, it possesses 22,000 acres of land, which has a market value of approximately `1 lakh crore. With the available land, the VSP could expand its production capacity to 10 million tonnes per year. Even if the SCCL were to acquire stakes in the VSP, the crucial question is whether it would be economically viable for the Telangana government or not.
The VSP does not have captive mines, and the Telangana government would have to compete with private players in the auction to obtain the necessary raw materials for the VSP. Regardless of whether the Telangana government succeeds in its mission, its decision to submit the EoI will undoubtedly spark a political debate in the Telugu states.
KCR met officials
■ After the Centre invited EoIs to provide working capital and purchase VSP’s products, the BRS, seeing it as the first step towards the sale of plant, decided to write to the Centre against privatisation
■ KCR recently met officials to discuss the VSP and told them to proceed with the EoI submission