Jagan’s 3 suggestions to PM to salvage Vizag steel plant

Visakhapatnam, Feb 17 : Andhra Pradesh Chief Minister Y.S. Jagan Mohan Reddy on Wednesday met with labour union leaders spearheading the fight against the privatisation of Visakhapatnam Steel Plant (VSP), informing them that he has written a letter to Prime Minister Narendra Modi, suggesting the available possibilities to salvage the plant.
Allocation of mines in Odisha, converting bank debt into equity, and selling steel plant’s surplus land are the three major suggestions given by Reddy to the Prime Minister, among others.
“Mines should be allocated to VSP in adjacent Odisha which has plenty of iron ore reserves,” said Reddy.
He said the plant has about Rs 22,000 crore debt, out of which up to Rs 11,000 crore was availed as working capital debt, including some debts availed at hefty interest rate of up to 14 per cent.
“Bank debts with excessive interest rates could be converted into equity to reduce the burden of interest. This could help reduce debt between Rs 2,500 crore and Rs 3,000 crore, enabling the company to return to profit,” the Chief Minister said.
Another idea he suggested to the Prime Minister is monetising the steel plant’s surplus land. Reddy said VSP owns 20,000 acres of land, out of which 7,000 acres are lying idle.