Solid support for Vizag Steel Plant

Visakhapatnam: The New Year brings optimism for Rashtriya Ispat Nigam Limited (RINL), which has been struggling for a while but is now poised to regain its former glory. The approval of a revival plan by the Union Cabinet, totaling Rs 11,440 crore, is set to breathe new life into the Visakhapatnam Steel Plant (VSP), which is expected to reach full operational capacity by August 2025.

Union Minister Ashwini Vaishnaw confirmed that RINL will commence full-scale steel production with two blast furnaces in early 2025, with a third furnace expected to be operational by August of the same year. The equity infusion of Rs 10,300 crore into RINL will address critical operational challenges, including working capital issues. Additionally, a working capital loan will be converted into preference share capital worth Rs 1,140 crore, completing the Rs 11,440 crore revival package.

The Union government announced this comprehensive revival plan in January, with the goal of bringing the VSP to its full capacity within the next seven months.

The plant currently operates three blast furnaces (BFs), but BF-1 has been idle for the past three months due to a shortage of raw materials. While BF-2 and BF-3 have continued operations, even these furnaces have struggled. BF-3 was out of service for nearly two months before resuming operations, and despite their combined capacity of over 14,000 tonnes, production has not exceeded 10,000 tonnes in recent months.

The NDA government, after assuming power, quickly focused on preventing the privatization of VSP, a priority that the previous YSRCP government had not addressed in the past five years.

The Centre had previously allocated Rs 1,640 crore to the plant, and with the approval of the Rs 11,440 crore revival plan, VSP is now on a path to recovery after years of losses.

With the infusion of funds, key challenges such as raw material procurement will be addressed, and the plant is expected to operate at its full capacity of 7.3 million tonnes. If the plant is merged with SAIL or allocated its own captive mines, employees and trade union leaders believe VSP could become one of the leading steel plants in the country for the long term.