Large scale opposition to privatization of Visakhapatnam Steel Plant

Thousands of workers of the Visakhapatnam Steel Plant assembled at the Greater Visakhapatnam Municipal Corporation office in Visakhapatnam on 5th February, and took out a protest rally against the proposed divestment of Rashtriya Ispat Nigam Limited (RINL), the corporate owner of the Steel Plant.

Protest demonstration by workers of Vizag Steel Plan workers
Vizag Steel Plant workers demonstrate against privatisation on 5 Feb 2021

This followed a protest demonstration on 3rd February, by over 1,000 workers of the plant on its premises, against the central government’s attempts to sell its stake in the RINL.

The workers demanded that the central government withdraw its proposal for disinvestment in the steel plant, which is one of the biggest and most profitable public sector undertakings in the state of Andhra Pradesh. The PSU is one of the major low-cost steel producing companies in the world and the only integrated steel plant in South India.

Protest demonstration by workers of Vizag Steel Plan workers
Employees of Vizag Steel Plant demonstrate against privatization of their plan

The Secretary of DIPAM (Department of Investment & Public Asset Management) notified on 3rd February  that the CCEA (Cabinet Committee on Economic Affairs) had, on 27th January, given in-principle approval for 100% strategic disinvestment of the shareholding of the government of India in RINL, along with management control, as part of the plan for its privatization.

It may be noted that the government has budgeted Rs 1.75 lakh crore revenue income from disinvestment in 2021-22. The proceeds from the strategic sale of RINL are expected to be part of this disinvestment target.

A statement issued by the president of the plant’s official trade union states that “about one lakh people are dependent on the steel plant, including 17,000 permanent employees and workers and 16,000 contract workers. The plant was established in 1988 after a prolonged struggle to set it up in Visakhapatnam.  In the Visakha Ukku – Andhrula hakku movement 32 people laid down their lives and 70 legislators, including MPs and MLAs, resigned from their posts demanding that the PSU is set up there. It is now the biggest PSU in the state and the people will not allow private entities to take it over.”

The General Secretary of the Steel Employees Congress has declared that all the trade unions in the steel sector are opposing this move of the central government and would launch a statewide agitation if the government does not withdraw its decision.

Left parties demo
Political parties hold a dharna to protest the proposed privatisation of RINL

Trade union leaders representing the steel workers have refuted the government’s claim that RINL had accumulated huge losses and therefore its disinvestment is justified in the national interest. They have pointed out that RINL incurred a net profit of Rs 96 crore in 2018-19. As a leader of Centre of Indian Trade Unions (CITU) explained, “It is only in recent years that the plant was incurring losses, mainly owing to the crisis in the steel industry. Another main reason is the non-allotment of captive mines (by the central government) in spite of numerous requests. The plant can expand and revive on its own with minimal government support.”

The Visakhapatnam Steel Plant, it has been reported, had increased steel production from 3.4 million tonne to 7.3 million tonne with its own funds and with bank loans. The RINL has paid Rs 43,000 crore to Andhra Pradesh and the Centre towards various taxes and dividends so far. Elaborating on the financial strength of the plant, the leader of the workers’ union has said that “It must be recalled that the Central Government has invested Rs 4,900 crore into the plant since its inception while the state government had made an investment of about Rs 42,000 crore. The plant has about 22,000 acres of land in Vishakapatnam.”

In 2020, under the directions of the Union Steel Ministry, RINL signed a Memorandum of Understanding (MoU) with South Korean Steel Corporation POSCO to set up a joint venture on the plant’s land in Visakhapatnam. Trade unions have opposed the proposed joint venture with POSCO calling it a prelude to privatisation of the plant.

So strong is the opposition of the workers to the central government’s decision on disinvestment of the steel plant, that political parties of the opposition, including the ruling YSR Congress, have been forced to support the agitation.

It has also been reported that on January 25, 2021 the central government sought Expression of Interest (EoI) for the strategic disinvestment (i.e. privatization) of the Odisha-based Neelachal Ispat Nigam Ltd (NINL). Employees of the steel unit have been protesting, demanding that the government consider merging the loss making NINL with RINL or SAIL or other steel PSUs for its revival.

Despite the popular opposition, the central government is pushing ahead with its plan to disinvest its stake in valuable public assets such as the steel plants, along with various other public sector enterprises. This is totally against the interests of the working class and people of our country.

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