By Surya Kumar
Visakhapatnam: The decision of Chairman-cum-Managing Director of Rashtriya Ispat Nigam Limited (RINL) Atul Bhatt to go on leave suddenly till completion of his tenure has raised many eyebrows across Andhra Pradesh.
His term was due for expiry on November 30. The condition of RINL, the corporate entity of Visakhapatnam Steel Plant has worsened due to severe working capital scarcity and heavy interest burden due to capex. It has a total outstanding amount of nearly Rs 18,000 crore. Since Bhatt took over, due to hand-to-mouth existence the salaries of 13,000-odd employees and officers have been disbursed in two installments for the past few months. There is an undeclared ban on fresh recruitment.
“A simple option to make it profitable by further expanding its capacity by merging it with Steel Authority of India Limited (SAIL) has been made a complex issue after the BJP-led NDA Government at the Centre in 2021 decided to sell RINL, its joint ventures and subsidiaries lock, stock and barrel,” J. Ayodhyaram, honorary president of CITU-affiliated Steel Plant Employees’ Union (SPEU), told Siasat.com.
At present, RINL is not able to optimise production as only one blast furnace out of three is being operated.
In a circular, the Ministry of Steel has named A.K. Bagchi, Director (Projects) with the responsibility to work as the CMD till November 30 or till the assignment of additional charge or regular appointment. The Public Enterprises Selection Board has recommended Fertilisers and Chemicals Travancore Ltd (FACT) Director (Finance) S. Sakthimani for the post of RINL CMD. The Appointments Committee of Cabinet (ACC) headed by the Prime Minister will issue the formal order appointing him after getting clearance from statutory agencies like CBI and CVC.
The sudden decision to go on leave by Bhatt with little over two months left for completion of his tenure had led to speculation that there could be a directive from the Ministry of Steel to leave him following receipt of several complaints of corruption and failure to optimise production. RINL, though has a capacity to produce 7.3 million tonnes per annum, due to a variety of reasons including steep increase in prices of raw material and failure to get captive mines has complicated its financial condition leading to a very critical working capital crisis.
During their maiden visit to the steel plant, set up after a Statewide agitation in the 1960s across Telangana and Andhra Pradesh, Union Steel and Heavy Industries Minister H D Kumaraswamy and MoS B Srinivasa Varma representing Bhimavaram constituency in Andhra Pradesh, declared in July that they are examining various options to put RINL back on the track. They also during interactions with the trade unions told not to have any fears about their future, categorically ruling out the closure of the steel plant.
The Cabinet Committee on Economic Affairs gave the green signal for strategic disinvestment of RINL by way of privatisation nearly four years ago. Since then, the employees have been on a warpath not allowing the Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance not to allow any team for due diligence study. Valuation of assets and liabilities is a prerequisite before calling for an Expression of Interest (EoI) from prospective buyers. According to the buzz, both Jindal and Adani Groups have evinced interest in buying RINL due to the huge land bank, an extent of 15,000 acres available at the disposal of the steel plant.
