BRS set to make political capital out of Vizag Steel Plant privatisation issue

Hyderabad, April 16: Looking to expand its presence to Andhra Pradesh, Telangana's ruling party Bharat Rashtra Samithi (BRS) appears to have strike a right chord by not only opposing privatisation of Visakhapatnam Steel Plant (VSP), but also expressing its intention to bid for the public sector undertaking.

The BRS move has put the emotive issue on the political discourse in the neighbouring state and set off tremors in the ruling YSR Congress Party (YSRCP) and main opposition Telugu Desam Party (TDP) as well. Both parties had pushed the issue to the backburner to remain in the good books of the BJP-led government at the Centre.

The series of developments over the last couple of weeks has made the issue of VSP privatisation and the plan of BRS to participate in the bidding a hot topic of debate in the political circles in Andhra Pradesh.

While it is still unclear if Telangana government will submit Expression of Interest through Singareni Collieries Company Limited (SCCL) to acquire VSP, the BRS has succeeded in placing the issue on the political discourse, embarrassing both YSRCP and TDP who are coming under flak for not mounting pressure on the Centre to stop disinvestment process.

Political observers believe that irrespective of whether the disinvestment process goes ahead or not, the BRS has succeeded in projecting itself as a party which can fight to safeguard the interests of Andhra Pradesh.

"This is expected to help BRS get a foothold in Andhra Pradesh, where a majority of people still see it as a party responsible for the division of united Andhra Pradesh," an observer said.

After changing its name from Telangana Rashtra Samithi (TRS) to BRS a few months ago, this is the first time that the party appears to have made an effort to reach out to people in the neighbouring state.

BRS, which has been opposing privatisation of PSUs by the Modi government, had already demanded protection of VSP.

At a time when Rashtriya Ispat Nigam Limited (RINL), the corporate entity of VSP, set the bidding process in motion, BRS working president and Telangana's industry minister K.T. Rama Rao came out with an open letter to the Centre.

KTR extended support to the employees of VSP who have been protesting against the Centre's disinvestment plan for two years.



"Vizag steel is the right of Telugu people and the responsibility is on us to save the steel plant," KTR had said.

In the open letter, KTR detailed the 'evil' plans of Modi government to hand over VSP to private players, the reasons behind the steel plant incurring losses, and the ways in which the plant could be revived.

The BRS leader claimed that the central government did not allocate captive iron ore mines to VSP and as a result the company is forced to spend up to 60 per cent of its production cost on raw material.

Stating that an Expression of Interest (EoI) notification was issued in the garb of mobilising funds for working capital and raw materials, KTR said that the Modi government was indirectly attempting to hand over the PSU to private entities through the notification.

Stating that VSP is not able to operate at its full capacity of 7.3 MTPA as the central government is not providing raw materials and capital, BRS working president said that the enterprise which is working at 50 per cent of the capacity is incurring the same production cost it incurs for working at 100 per cent capacity.

He said that if the Centre extends support, the enterprise can work at full capacity which will help it in generating profits. He said that VSP can compete with private companies if the central government provides loans to it on par with private companies and facilitates provision of capital through banks.

Maintaining that the Centre should stop conspiring to privatise a PSU which has Rs 1.5 lakh crore worth assets, KTR demanded that the Modi government should extend Rs 5,000 crore financial assistance to the steel plant.

Reacting to KTR's letter, former joint director of the CBI, V.V. Lakshminarayana had suggested that either Andhra Pradesh or Telangana government should submit the EoI for VSP.

A few days later came the reports that the Telangana government intends to submit EoI through SCCL for the acquisition of VSP.

The Telangana government enjoys a majority stake in SCCL of 51 per cent while the Centre holds the remaining 49 per cent.

KTR later confirmed that Chief Minister K. Chandrasekhar Rao has sent a team of SCCL officials to VSP to examine the feasibility of submitting EoI.

Employees of VSP welcomed the interest being shown by Telangana in acquiring VSP while Jagan Mohan Reddy-led YSRCP government found itself on the backfoot. Andhra Pradesh industry minister Gudivada Amarnath issued a statement claiming that the state government remained opposed to privatisation of VSP.

Amarnath also targeted BRS for its contradictory stand. "One the one hand BRS saying it is opposed to privatisation of PSUs while on the other it is planning to participate in bidding," he said.

Adding a new twist, KTR alleged that the Centre has gone back on its commitment to set up a steel plant at Bayyaram in Telangana and it is going ahead with privatisation of VSP as it handed over Bailadila iron ore mine which can be captive mine for both the plants to Adani group.

Around the same time, another Telangana minister Harish Rao slammed YSRCP and TDP for their silence over the VSP issue.

On April 13, Union Minister of State for Steel Faggan Singh Kulaste announced in Visakhapatnam that the Centre will not go ahead with the disinvestment plan. He told the media that the Centre will work to strengthen the plant.

BRS leaders claimed credit for the Centre's announcement. KTR stated that it was aimed at diverting public attention from the allegation he made about Bailadila mining contract in Odisha awarded to the Adani Group.

However, within 24 hours the Centre took a U-turn. The Ministry of Steel issued a statement that there is no freeze on the disinvestment process of RINL.

The VSP employees intensified their protest demanding the Centre to stop disinvestment. However, the Centre remained unmoved.

The RINL extended the deadline for submission of bids for five days till April 20. It had invited bids to provide working capital, raw materials and purchase products of the VSP.

More than 20 companies including six international steel export companies have so far submitted their bids. Interestingly, former CBI officer V.V. Lakshminarayana also submitted a bid on behalf of a private company. He plans to mobilise funds through crowdfunding.

The Telangana government has still not submitted its bid. While it remains unclear if it will do so, BRS flags have already come up in Visakhapatnam and its leaders in Andhra Pradesh are planning to contest all Assembly and Lok Sabha seats in the state in the 2024 elections.