Government act to merge RINL and SAIL condemned by Vizag plant workers

New Delhi: The government's plan to merge debt-laden Rashtriya Ispat Nigam Ltd (RINL) with the Steel Authority of India (SAIL) Ltd appears to be impacting the employees at the Vizag plant.

At least 4,000 contract workers at the Vizag Steel Plant (VSP) are reported to have had their gate passes canceled by the management on Friday amidst talks of the revival of the state-owned steel maker.

After protests, the workers were eventually allowed back inside. However, RINL employees believe that this was a deliberate move to eventually shut down the plant. There are reports that the management is also trying to find ways to decrease the workforce in anticipation of a potential merger with SAIL.

Trade unions have demanded that the steel ministry make an official announcement on the merger plan so that the management’s moves become more transparent.

They also allege that the so-called merger plan is a cover for the closure of the plant and that the cancellation of gate passes of contract workers is a part of this move.

They also cite the instance of a proposal to send 500 employees of RINL to the Nagarnar plant of NMDC in Chhattisgarh. While a merger with SAIL is one of the options under the consideration of the steel ministry, other options like injecting fresh capital, privatization through a sale of assets, monetizing some assets through the sale of a land parcel of 1,500-2,000 acres to NMDC for a pellet plant are also under the consideration of the steel ministry, say reports.

However, being a store-based steel plant, RINL does not have a captive iron ore mine or a coal mine and this is cited as the main reason for the crisis. Also, two of VSP’s three blast furnaces are now closed.

RINL registered a loss of Rs2,859 crore in FY 2022-23 and accumulated debt to the tune of Rs20,400 crore, forcing the company to default on loans worth Rs410.5 crore as of June.