Allocating captive mines to private competitors is a threat to Vizag Steel: E.A.S. Sarma writes to Union Minister

Former Energy Secretary raises concerns over government favoritism towards private companies, threatening the viability of RINL-Visakhapatnam Steel Plant.

Former Energy Secretary E.A.S. Sarma, in an open letter to Union Steel Minister H.D. Kumaraswamy, raised concerns over granting a captive mine and a captive port to the private company ArcelorMittal, which is only a few kilometres away from the RINL-Visakhapatnam Steel Plant (VSP). He said that the move could pose a threat to the VSP’s operations.

Mr. Sarma alleged the government deliberately refused to allot a captive iron block to RINL-VSP and that allocating more than one iron ore block to each of VSP’s private competitors shows the government’s undue proximity to private mining companies.

In his letter, the former Energy Secretary also claimed that the move indicated the government’s hidden agenda of selling RINL for a song to a favoured business group.

The so-called financial relief package of ₹11,440 crore, which is being offered to revive VSP, is nowhere near the amount required to make the plant viable, he asserted.

“As of date, more than ₹30,000 crores is required to settle RINL’s overdue, including repayment of its outstanding debt,” Mr Sarma said, adding that RINL needs a captive iron ore mine to produce steel at a competitive price and remain viable in the long run.

“Ignoring the suggestions to merge the RINL with SAIL, the NDA government seems more interested in handing over RINL’s ownership for a pittance to a private party, for reasons best known to it. The people of this region are fully aware of the employment potential offered by the RINL, especially the policy of reservations for SCs/STs/OBCs that empowers the disadvantaged, which a private company would deny,” Mr. Sarma said.

“What causes distress is that the successive political establishments in Andhra Pradesh have openly connived with the NDA-led government at the Centre to encourage private business groups to set up steel plants in the State to compete with RINL and erode its customer base by giving them undue advantages,” he said.