Around 9,000 acres of the excess land with state-run Rashtriya Ispat Nigam (RINL) may be separated from the entity before it is put up for sale.
The government expects participation from all major domestic steel firms and a couple of international players as the privatization process for the 7.3 million tonne per annum (mtpa) port-based unit located in upmarket Visakhapatnam is about to begin.
Currently, RINL has 19,730 acres in its possession. The plant is located on around 11,000 acres and is sufficient to take the plant capacity to around 11 mtpa.
Steel firms looking to expand capacity, particularly in long products, may find the port-based unit attractive, said a senior government official.
The plant has also staged a turnaround in 2021-22. After incurring losses in the previous two fiscals, RINL has earned a Rs 835-crore profit before tax (PBT) in FY22 on a turnover of Rs 28,082 crore, its best ever. During the year, it also recorded a highest-ever saleable steel production at 5.14 MT since the plant started operations in 1992.
Most of the land – 11,794 acres – owned by the company were taken over from private sector and are meant for “project purpose and for any purpose incidental to or connected with the Visakhapatnam steel project”. Also, 9,798 acres of the state government land was transferred to it, taking the total land to 21,592 acres.
However, RINL has given around 2,000 acres on lease to various agencies, including the railways, the Andhra Pradesh government for Gangavaram Port and the National Highways Authority of India (NHAI).
On January 27 last year, the Cabinet Committee on Economic Affairs (CCEA) granted an ‘in-principle’ approval for 100% disinvestment of the government’s shareholding in RINL along with its stake in subsidiaries and joint ventures through a strategic disinvestment by way of privatization .
Though there has been a stiff resistance by the trade unions and the state government, the Center seems determined to carry out the process as it would lead to capital infusion, capacity expansion, infusion of appropriate technology and better management practices with resultant higher production and productivity .
The Center has already invited bids from valuers as part of the privatization process for RINL.
As RINL does not have any captive iron ore mine, steel ministry has approached Odisha, Chhattisgarh and Andhra Pradesh governments for granting iron ore blocks on nomination basis. RINL has also been participating in allocation of iron ore mines through the e-auction route.