Visakhapatnam Steel Plant in a Tight Spot As It Falls Into ₹136 Cr Debt

Since the news of its privatisation, the RINL-Visakhapatnam Steel Plant (RINL-VSP) is currently grappling with a significant electricity bill backlog amounting to ₹136.53 crore, payable to the Andhra Pradesh Eastern Power Distribution Company Limited (APEPDCL). This financial strain comes at a time when thousands of workers are protesting against the plant’s impending privatisation.

Previously, the plant was self-sufficient in its electricity needs, often diverting excess power to government utilities for public use. However, the situation took a turn when the Centre announced plans for privatisation in January 2021. The plant’s power production began to decline, leading to increased reliance on external power utilities like APEPDCL.

RINL-VSP sources reveal that the plant’s total installed capacity is 539MW. However, power generation has been dwindling as the plant has been struggling to receive sufficient coal to run it since the privatisation announcement. To meet its energy demands for steel production, the plant has been drawing an average of 155 MW of electricity per month from APEPDCL, peaking at 165 MW in March.

In terms of payments, APEPDCL sources indicate that the steel plant only managed to pay ₹55 crore of the ₹96.97 crore electricity bill for January 2024. The remaining ₹41.97 crore, along with the entire February bill of ₹94.56 crore, is still pending, bringing the total dues for January and February to ₹136.53 crore. Amid privatisation crisis, this financial duress of the Visakhapatnam Steel plant is making news.

About Visakhapatnam Steel Plant privatisation:

The issue surrounding the privatisation of the Vizag Steel Plant emerged from the Indian government’s move to privatise the Rashtriya Ispat Nigam Limited (RINL), commonly known as the Visakhapatnam Steel Plant. Once a profitable entity, the plant reportedly fell into a cycle of substantial losses attributed to mismanagement and corruption. This decision ignited extensive protests across various societal strata, with calls for a reversal of the privatisation decision. The plant, which was established in 1982 following a sustained public movement, is viewed as a symbol of Andhra Pradesh’s pride.

Read also: Revanth Reddy addresses Visakhapatnam Steel Plant privatization concerns in Vizag

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