Bangalore, December 14: Rajeev Chandrasekhar, member of the Rajya Sabha from Karnataka, has urged Prime Minister Manmohan Singh to grant the iron ore mining lease sought by the public sector Visvesvaraya Iron and Steel Ltd. (VISL), Bhadravati, and to rejuvenate the company with a fresh infusion of funds.
He said the Union government should immediately clear the proposal sent by the Karnataka government for allotting a 243-acre mining site to the VISL. Further, the Centre and Steel Authority of India Ltd. should withdraw any plan to privatise VISL and instead make serious efforts to rejuvenate it through capital infusion and modernisation, and take the necessary steps to make VISL a part of SAIL’s Rs. 60,000-crore modernisation programme.
Mr. Chandrasekhar said the promise made by successive governments on the modernisation plan announced by SAIL in 1989 — after its takeover of VISL — is yet to be implemented. This failure to implement the promised modernisation plan has deprived VISL of funds over the years, and in 2004, the lease period of its captive mine in Kemmangundi ended. In the last nine years, VISL has failed to get a captive mine, despite assurances by both central and the State governments. “It is indeed a matter of great disappointment that the company, which was formally brought in as a subsidiary of SAIL by the then Prime Minister Rajiv Gandhi, on August 18, 1989, has reached this stage.”
He said it is clear that the government’s approach towards Public Sector Units (PSUs) is flawed, where a PSU is pushed to the brink and then given an extreme choice of either being bailed out using taxpayer or public funds, or shut down. The government must have a clear-cut roadmap for growth and value creation for PSUs such as VISL.”
All such PSUs, Mr. Rajeev Chandrasekhar said, “play a role in supporting local communities where they are located and must be treated as taxpayers’ equity. The current reactive start-stop approach puts at risk the thousands of crores of taxpayer funds that have already been invested. Given the important role that these PSUs play in these communities, where local citizenry and people depend upon them for their livelihood, any decision regarding PSUs should be measured, well-thought through and taken after considering all factors”.
The government should take note of the plight of thousands of people in Bhadravati, who face an uncertain future due to the decision of Steel Authority of India Ltd. (SAIL) to convert the iconic VISL into a joint venture (JV) with a private player.
“I have received petitions from residents of Bhadravati, who fear for their future and apprehend that the decision to form a JV is one step closer to privatisation. Until a year ago, SAIL’s top leadership talked of technological upgrading and financial support to modernise VISL. It is, therefore, unclear what has changed for SAIL to now issue expression of interest and seek a JV partner,” he said.
It should be noted that VISL, set up by Sir M. Visvesvaraya, began steel production in 1923 and supplied alloy steel to important sectors like defence and aviation. It is an important symbol of Karnataka’s history and industrialisation, and an integral part of Karnataka’s regional economy.