Visakhapatnam: In a significant development, the Central Government has decided to backtrack on the privatisation of the Visakhapatnam Steel Plant (VSP). Officials received confirmation from the Union Ministry of Steel, which outlined plans for employee adjustments as part of future operations.
The government aims to restore the plant's operations to full capacity after shutting down two blast furnaces due to ongoing financial challenges. Workers at VSP have been advocating for a resolution to their struggles for the past 1,324 days.
In a strategic move, the Central Government is considering merging VSP with Steel Authority of India Limited (SAIL). This merger is projected to enhance India's steel production capacity to 300 million tonnes by 2030. Discussions between Chief Minister N Chandrababu Naidu and Deputy Chief Minister Pawan Kalyan have emphasised the potential benefits of this merger.
With an investment plan of Rs 1.10 lakh crore, the merger aims to increase SAIL’s production capacity from 20 million tonnes to 30 million tonnes over the next seven years. It is estimated that VSP could reach a production capacity of 27.5 million tonnes in the next financial year with minimal investment.
Crucially, neither the State nor Central Governments are required to invest additional funds for the merger. The consolidation is expected to save at least Rs 30,000 crore and facilitate an immediate increase in production capacity, while also reducing production costs by Rs 5,000 to Rs 6,000 per tonne.
Labour Unions believe that the merger could further expand Visakhapatnam Steel's capacity by an additional five million tonnes in the future, potentially creating up to 10,000 new jobs.
Read more: No Privatisation Of Visakha Steel Plant, Union Minister Kumaraswamy Allays Fears Of Employees
