Andhra Pradesh Chief Minister Y S Jagan Mohan Reddy called on Union Steel and Petroleum Minister Dharmendra Pradhan and urged him not to privatise Visakhapatnam Steel Plant (VSP). On his second day of a two-day visit to Delhi, Reddy held over an hour-long discussion with Pradhan on the Kakinada Petro Complex and VSP, according to an official statement.
In the meeting, the CM appealed to the central government to stop privatisation of VSP and requested it to consider the alternatives suggested by the state in reviving the plant. He said 20,000 people are employed in VSP and thousands more are having indirect employment. The company performed well and generated profits between 2002 and 2015.
The plant has gone through an expansion by taking loans, but due to the slump in the international market during 2014-15, the company fell into debts with the increasing operational costs and lack of own mines, he said.
Reddy requested to allot the captive mine in Odisha that will help in reviving VSP. He also suggested other possibilities in restructuring the finances of VSP, where all the short-term and long-term loans could be converted into equity easing the burden.
The plant has a debt of Rs 22,000 crore, which is being serviced at interest rates as high as 14%. Conversion of these loans into equity and listing the entity on the stock exchange, would remove the interest burden totally, where the banks would also encash through the stock exchange, he added.
The CM said VSP has supplied 7,000 tonnes of oxygen during the second wave of COVID-19, saving lives of people in hard times.
Discussing the Kakinada Petro Complex, Reddy said a promise was made to set up a petro complex at Kakinada SEZ (special economic zone) under the Andhra Pradesh Reorganization Act. The detailed project reports (DPRs) have been prepared for the project by HPCL-GAIL companies together with a capacity of one million tonne and at a cost of Rs 32,900 crore.
As the Centre has asked for Rs 975 crore per annum under viability gap funding (VGF) for 15 years, the chief minister requested to cut down VGF as the state could not bear such a burden in the present circumstances.
Reddy said the central government has reduced the corporate tax by 25% and overall rate of interest across the world had also been reduced. He added that the project can be made possible without any VGF. He said members have already been nominated for the working group on behalf of the state government to discuss the project modalities. Reddy also asked the Centre to issue immediate directions to start the project.
The Union minister has assured that a petro complex will definitely be set up in Andhra Pradesh and meeting will be scheduled next week, the statement added.
