Telangana Government To Place Bid For Acquisition Of Vizag Steel Plant

Telangana government plans to acquire Rashtriya Ispat Nigam, or Visakhapatnam Steel Plant (VSP), in Andhra Pradesh. It will submit an expression of interest (EoI) before the 15 April deadline.

The Telangana government plans to procure its products for state infrastructure projects. Telangana Chief Minister K Chandrasekhar Rao held a meeting with officials and instructed them to proceed with the submission of the EoI.

Officials from the Telangana government are set to visit VSP soon.

Potential entities to submit the EoI for the steel plant include the Singareni Collieries Company Limited (SCCL) and the Telangana State Mineral Development Corporation (TSMDC), both of which have a significant stake held by the state.

On 27 March, the central government asked private companies and steel manufacturers to support the VSP with working capital and purchase its products.

VV Lakshminarayana, the former joint director of the CBI, recently suggested on Twitter that the Andhra Pradesh or Telangana government should submit an EoI for the VSP.

The Andhra Pradesh government has requested that the Centre not privatise the VSP, but has not expressed any interest in submitting an EoI.

The decision of the Bharatiya Janata Party (BJP)-led central government may benefit the BJP in Andhra Pradesh, but it could also create an uncomfortable situation for the current chief minister, YS Jagan Mohan Reddy, who opposes the privatisation of the VSP.

Despite being unprofitable, the VSP has an enormous plot of land spanning 22,000 acres with an estimated Rs 1 lakh crore value. Using this land, the plant could potentially increase its production capacity to 10 million tonnes annually. However, even if SCCL were to purchase shares in VSP, the primary concern is its economic feasibility for the Telangana government.

Telangana government must compete with private players in the auction to obtain raw materials for VSP, as it doesn't have captive mines. Whether successful or not, the decision to submit an EoI will trigger political discussions in Telugu states.