HYDERABAD: A move by the Union Steel Ministry for transferring control of the Visakhapatnam Steel Plant (VSP) to the Steel Authority of India (SAIL) is being strongly opposed by the State Government.

The proposal comes ahead of Prime Minister Manmohan Singh's visit to Visakhapatnam on May 20 to lay the foundation stone for an ambitious programme for VSP's modernisation at a cost of Rs. 8,692 crores. This signals the dawn of a new era for the steel plant as its capacity would be upgraded from the present 3.3 million tonnes to 6.3 million tonnes.

Chief Minister Y. S. Rajasekhara Reddy, who will be present at Visakhapatnam during Mr. Manmohan Singh's visit, is expected to take up the issue ahead of a meeting of political leaders called for by the Union Steel Ministry in New Delhi sometime next week. VSP is now part of a corporate entity, Rashtriya Ispat Nigam Limited.

Turnaround

The steel plant's fortunes have shown a remarkable turnaround in the last three years with profit accruing touching nearly Rs. 5,000 crores. Before it hit the purple patch, the VSP was almost being referred to the Board for Industrial and Financial Reconstruction (BIFR) as a sick unit.

But, its fortunes could now only be on the upswing in the coming years as the plant is all set to bag a huge order from China where vast construction activity has been on for the Beijing Olympics.

The State Government has taken a bleak view of the Centre's proposal as it feels that the plant can sustain itself. Echoing this view, Minister for Commercial Taxes Konathala Ramakrishna told The Hindu on Tuesday: "When the plant was in the red, SAIL was not interested in its takeover. Now that it is making huge profits they are eyeing it. This is unacceptable to us."

Plant capacity

The Andhra Pradesh Government recently sought lease rights for iron ore mining in Chattisgarh and Orissa as the steel plant has no direct linkage of its own now and it is crucial that it has a facility of its own in this regard.

The plant capacity was originally designed to have a 10 million tonnes which could even be upgraded to 15 million tonnesd, the Minister said, and argued that "it deserves a mini Ratna status."

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