Center approves RINL renewal plan of Rs 11,440; The issue of privatization does not appear: Minister of Steel
The Union Cabinet has approved a Rs 11,440-crore revival package for Rashtriya Ispat Nigam Ltd to help the struggling steelmaker amid financial woes, Union Steel Minister HD Kumaraswamy said on Friday.
He also said that the issue of the establishment of a private steel company is not coming up.
“The Visakhapatnam Steel Plant has a special place in the hearts and minds of the people of Andhra Pradesh. During yesterday’s Cabinet meeting, it was decided to provide equity support to the plant over Rs 10,000 crore. This was done in recognition of the importance of the steel industry in building Aatmanirbhar Bharat,” said Prime Minister Narendra Modi. at the post office at X. In January 2021, the Cabinet Committee on Economic Affairs (CCEA) approved the government’s 100 percent divestment of debt-ridden Rashtriya Ispat Nigam Ltd (RINL) under the Ministry of Steel, amid poor financial and operational progress.
At a press conference in the national capital, Kumaraswamy said that the Cabinet Committee on Economic Affairs, chaired by the Prime Minister, on Thursday approved a plan to revive RINL at a cost of Rs 11,440 crore.
“Private matter will not arise in RINL (after capital injection). That’s why we actually took a decision, we convinced our Prime Minister. The feeling of our brothers and sisters of Andhra Pradesh on that basis, we convinced our Prime Minister, Actually we respect him. citizens of Andhra Pradesh,” said Kumaraswamy, answering a question related to the government’s plan to privatize RINL.
The package came about after good support from the Prime Minister, Kumaraswamy said, adding that he had been holding many meetings to look at ways of RINL’s survival.
“I have met with the Minister of Finance many times and with the bankers. However, finally, today the package has been announced.” Sharing his vision for RINL’s future, Kumaraswamy said he has taken up the challenge of making RINL’s Visakhapatnam Steel Plant the top steel producer in India.
“We will successfully demonstrate that the Vishakhapatnam plant will be the first base in India to produce steel. That is my challenge, I have accepted it,” he said.
7.5 million RINL steel plant in Visakhapatnam in Andhra Pradesh has been facing severe financial and operational problems for the past few years. Two of the three blast furnaces (BF) were shut down until October 2024, when the second BF was activated approximately 4-6 months later. The total cost of RINL has crossed Rs 35,000 crore.
According to the minister, in July-August this year, all three furnaces will work and produce more than 92 percent.
Due to the condition of RINL, Kumaraswamy the company was working well till it had a capacity of 3 MTPA.
“This issue started when they (RINL management) decided to increase from 3 million tonnes to 6.3 million tonnes in 2014-15, they have increased their loan of Rs 11,000 crores from different banks with an interest rate of 13%.
“They didn’t have captive mines to run this plant. They have to buy raw material (8:36) from the open market. Again in 2016-17, they proposed expansion plan to 7.3 MT… Now, in fact. , the downfall of RINL started after going in this expansion,” he said.
Kumaraswamy also said that his ministry is working to acquire RINL’s iron ore mines for use in Odisha.
Meanwhile, in a statement, Union Minister of Railways Ashwini Vaishnaw and the revival package many of the legacy issues RINL has been facing will be resolved. At the same time a lot of effort will be made to procure raw material for RINL and to modernize the plant.
Out of this total package of Rs 11,440 crore, fresh equity injection of Rs 10,300 crore is there and conversion of working loan into preference share capital of Rs 1,140 crore. With this, all the employees of RINL and all the people connected with the economic activities of RINL will benefit a lot and Andhra Pradesh will have a major steel plant that has been revived in the coming days, he said.
