According to a report by the Press Trust of India (PTI), the government is considering a merger between Rashtriya Ispat Nigam Limited (RINL) and Steel Authority of India Limited (SAIL) as a potential solution to the financial and operational challenges faced by Visakhapatnam Steel Plant. This merger is among several strategies being discussed to secure the future of RINL’s steel plant. Other measures include selling land parcels to NMDC and securing loans to maintain operations.
A high-level meeting was recently held, involving officials from the Department of Financial Services (DFS), the Ministry of Steel, and the State Bank of India (SBI), given SBI’s significant loan exposure to RINL. According to sources, the government is determined to find a permanent solution, with the RINL-SAIL merger being one of the main options under consideration.
RINL, which falls under the Ministry of Steel, operates India’s first shore-based integrated steel plant with a 7.5 million tonne capacity in Visakhapatnam. However, it lacks captive iron ore mines, which has driven up raw material costs, a key factor contributing to its financial difficulties, as noted by workers’ unions.
In January 2021, the Cabinet Committee on Economic Affairs approved the strategic disinvestment of the government’s stake in RINL, including its subsidiaries and joint ventures. The company has accumulated debts exceeding Rs 35,000 crore and risks being classified as a non-performing asset by banks. Currently, only one of RINL’s three blast furnaces remains operational.
To ensure RINL’s viability, the Ministry of Steel is working with the Ministry of Finance on possible solutions, including the sale of a 1,500-2,000 acre land parcel to NMDC for a proposed pellet plant.
Read also: TUs plan three-day relay fast to protest against VSP privatisation move
Stay tuned to Yo! Vizag website and Instagram for more city and news updates.
Discussion about this post