Private Agencies Invited to Operate Two Core Units of Vizag Steel Plant

The Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Vizag Steel Plant (VSP), has floated tenders inviting private agencies to take over the operation and maintenance of two critical units – the Raw Material Handling Plant (RMHP) and the Sinter Plant. 

The agencies selected through this process will be responsible for the entire operational management of these two key units. This includes the deployment of manpower, plant maintenance, equipment handling, and production activities. 

In addition to operational responsibilities, the private agencies will also manage the workforce’s salaries and welfare. Approximately 2,000 employees are engaged in these two units, with around 700 being regular staff and the remaining employed on a contractual basis. Once the contract is given, the direct responsibility for these employees, including wage management and day-to-day operations, will shift to the private agencies.

This privatisation news of the Vizag Steel Plant comes at a time when the steel plant is also undertaking significant steps to increase its production capacity. The management recently notified of the revival of Blast Furnace-3, named Annapurna, whose operations were shut down due to severe coking coal shortages.

This revival adds an estimated 2.5 million tonnes per annum to the plant’s production capacity. The revival is part of a larger recovery strategy supported by the Central Government’s Rs 11,440 crore revival package, which aims to have two blast furnaces operational by January 2025 and all three running by August 2025.

These operational and structural changes are happening against the backdrop of ongoing protests from worker unions. While the plant’s management presents the outsourcing move as an essential step to enhance operational efficiency and ensure financial sustainability, unions and labour organisations argue that it amounts to a gradual and strategic privatisation of the core operations of Vizag Steel Plant.

The deadline for bid submission is set for July 12, after which the management will evaluate technical and financial proposals before giving the contract.

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