Centre goes ahead with VSP divestment plans, despite odds

Despite the strong resistance from the workers unions, the central government is going ahead with its plans to divest 10 per stake in Rashtriya Ispat Nigam Limited, the corporate entity of Visakhapatnam Steel Plant (VSP).

As a preface to the disinvestment, VSP had already been converted into a public limited company and the government had appointed merchant bankers to manage the initial public offer. If everything goes well, VSP’s shares will be listed in November.

The employee unions of VSP, however, are strongly opposing the government’s move. “The government is saying that it will divest only 10 per cent. However, once we agree, we fear that it will gradually go into the private hands,” D Adinarayana, general secretary, Visakha Steel Workers Union (recognised union in VSP), told Business standard.

 

The union government had, in 1998 and 2006, initiated steps to privatise the plant. But due to the workers' agitations, it had stepped back. Opposing the government's move, the recognised union has decided to go on a two-day strike on June 27 and 28. Besides, all the unions in VSP, in unison, are taking up agitation programmes like gate dharnas, public meetings, wearing black badges, signature campaigns and relay hunger fasts with families, he added.

“We have decided to approach all the union leaders of different industrial units in the state to gather support and fight against the government’s move,. Due to our agitations, the management has cancelled its proposed road shows in foreign countries. From 2017, the plant will earn more than Rs.5,000 crore profits every year. So, what is the need for divesting stake?” Adinarayana questioned.