Joint venture with POSCO will push steel plant into the red

 thehindu.com  11/22/2020 19:08:52 

The Central governments move of handing over land belonging to Visakhapatnam Steel Plant (VSP) to POSCO, the South Korean steel company, as part of the joint venture will push the PSU into red, said the speakers during the release of the book POSCO- Boon or Bane here on Sunday.

The book, authored by CITU State president Ch. Narasinga Rao, was released by G.S.N. Raju, former Vice-Chancellor of Centurion University, Visakhapatnam, ahead of the proposed one-day nationwide strike on November 26 called by trade unions against the new labour and farm laws introduced by the Centre.

The speakers said the Centre entered into an agreement on August 23 with the POSCO to run it as a joint venture company with Visakhapatnam Steel Plant (VSP).

The joint venture (JV) company is scheduled to commence production with a capacity of 5 million tonnes. The government has allotted the VSP land to the POSCO for this JV company, which requires an investment of 30,000 crore, of which at least 10,000 crore would have to be paid by the VSP, despite the fact that the PSU is already running a loss of 3,000 crore. This joint venture will push the VSP into further losses. The government intends to hand over the VSP to the POSCO, they said. Even as other steel plants across the country have been allotted iron ore mines, the NDA and the previous UPA governments have failed to allocate captive mines to the VSP, with the intention of handing it over to private players. This has resulted in the VSP incurring an additional expenditure of 2000 crore per annum, which is the primary cause of the VSP incurring losses, said Mr. Narasinga Rao, adding that CITU Visakha Committee had organised a 'Steel March' on April 5, 2018, demanding captive mines for the VSP.

The trade union leader noted that the VSP was established after a longdrawn struggle, and 32 persons sacrificing their lives. It was established as a public sector heavy industry, with a government investment of only 5,000 crore. But, the VSP has paid 40,303 crore as taxes and dividends. It has also expanded from 1.2 million tonnes to 7.3 million tonnes capacity, by raising funds from its own resources. It is the only steel plant in the State which supports 30,000 employees directly and over one lakh people indirectly, he said. The book POSCO-Boon or Bane explains the attempts of successive governments to privatise the VSP, and how the workers had struggled and defeated these attempts. This book also reminds the employees and officers of their duty to protect the VSP. The book is priced at 100.

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