Can Rs 11,440 crore rescue Visakhapatnam Steel Plant from financial crisis?

As the Union Budget session set to take place on 1 February 2025, the Visakhapatnam Steel Plant issue once again became a topic of discussion. 

Workers and trade unions, until recently, were in the doubt about government’s stand on plant. However, Union Steel Minister HD Kumaraswamy has cleared the air by announcing that the Steel Plant won’t be privatised. 

While addressing the media during his visit to to the plant, the minister said, “”We have apprised the Prime Minister of the Visakhapatnam Steel Plant’s status. An initial sum of Rs 1,650 crore has been sanctioned in two installments.”

“The workers’ efforts in producing 14,000 tonnes from two furnaces in December last year restored the Centre’s confidence in the plant. As a result, the Prime Minister approved a financial aid package of Rs 11,440 crore. An action plan will be finalised within 20 days,” the minister added. 

The minister assured that by June or July this year, all three blast furnaces will be operational, enabling the plant to reach its full production potential. 

Merger with SAIL

Merging Visakhapatnam Steel Plant with Steel Authority of India Limited (SAIL) has been a long-standing demand of the workers and trade unions. However, recently SAIL has rejected the merger. SAIL made its stand clear that an immediate merge of VSP is not possible with the amount of debts the it holds. 

The Rashtriya Ispat Nigam Limited (RINL), the corporate entity of VSP, has liabilities of Rs 35,000 crore with defaults in loan and interest payments.

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