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Indian unions protest privatization of Visakhapatnam steel plant

4 August, 2021On 2 August, with the Indian parliament in session, national trade union leaders joined hundreds of workers in the “Chalo Parliament” (“Let’s go to parliament)” protest in Delhi against the privatization of the Visakhapatnam steel plant in Andhra Pradesh.

The Visakhapatnam steel plant (VSP), operated by the corporate entity Rashtriya Ispat Nigam Ltd (RINL), is one of the major public sector steel plants in India. On 27 January 2021, the government of India’s cabinet committee on economic affairs decided to proceed with the 100 percent privatization of the government’s shareholding in RINL, along with RINL’s stake in its subsidiaries and joint ventures. The government initiated the process by appointing a transaction adviser, legal adviser and asset valuer. The government maintains that throughout the share purchasing agreement and business transfer agreement it will protect workers’ interests.

Workers' representative deliver their demands to the finance ministry

All trade unions and officers’ associations of VSP workers and non-manual employees, and political parties from the state of Andhra Pradesh, launched a mass movement protesting the privatization of VSP. The Andhra Pradesh state legislative assembly also passed a resolution demanding that the privatization not proceed. The privatization will affect about 35,000 employees and their families. A total of about a hundred thousand people who directly and indirectly depend on this plant for their livelihood will be affected by the privatization.

The Visakhapatnam steel plant as a public sector enterprise fulfils various strategic public objectives through its activities. The VSP was at the forefront of the fight against Covid-19 and saved countless lives, as it produced 18,000 MT of liquid medical oxygen in a short span of time and supplied it throughout India. Its timely action stabilized liquid oxygen prices in the market.

Trade unions argue that the VSP was established after a great sacrifice by people from 60 villages who vacated 22,000 acres of their land. Private ownership’s primary focus will be profit and it will not pursue the social and economic developmental objectives currently served by VSP for the benefit of local people and the country’s economy. The VSP promotes the constitutional values of social justice through affirmative action by recruiting from scheduled castes and scheduled tribes, which private ownership is likely to discontinue.

IndustriALL Global Union general secretary Valter Sanches, in a letter to the Prime Minister of India, called on the government to immediately stop the privatization.

Raghunath Pandey of the Indian National Metal Workers Federation said,

“We jointly with all trade unions and workers have intensified the protest against privatization. We will not allow the Modi government to sell this precious national asset. The VSP can be turned profitable through important business decisions. Trade unions have been demanding that the government should allot captive iron ore mines so that the plant can get its raw materials at cheaper cost. The government should convert the short term and long-term loans into equity so that VSP’s repayment and interest burden can be reduced. As the plant has already started earning quarterly profit in its operations, if it continues its present it will fully become profitable.”

Apoorva Kaiwar, IndustriALL South Asia regional secretary said,

“The public sector plants’ crucial role in fulfilling the country’s economic and social objectives with public purpose should be safeguarded. Workers and trade unions who played a central role in developing the Visakhapatnam Steel Plant should have a say in the corporation’s decision-making process. We call upon the government of India not to proceed with the privatization of VSP, hold genuine consultation with trade union and give a chance to the turnaround proposal put forward by the union.”