Sharmila demands clear assurance against privatization of Visakhapatnam steel plant

The potential privatization of the Visakhapatnam Steel Plant (VSP) has once again sparked political controversy in Andhra Pradesh. YS Sharmila, president of the Andhra Pradesh Congress Committee (APCC), sharply criticized Chief Minister N. Chandrababu Naidu, urging him to secure a clear commitment from Prime Minister Narendra Modi that the steel plant will not be privatized.

Sharmila emphasized that the state government must strongly advocate for VSP to remain under public ownership, suggesting that merging it with the Steel Authority of India Limited (SAIL) could be a viable solution.

The debate intensified after CM Chandrababu Naidu’s remarks during a recent Confederation of Indian Industry (CII) summit in Visakhapatnam, directed at employees. He questioned, “How will salaries come if people sit at home without working? Will the central or state government always provide money? Competence is necessary.”

Sharmila condemned these remarks, calling them insulting to the workforce. She criticized describing the plant, established under the late YS Rajasekhara Reddy’s leadership, as a ‘white elephant,’ implying employees were being paid without working. She demanded that the CM immediately retract his comments and apologize to the employees.

Responding to the criticism, Chandrababu Naidu reiterated that VSP would not be privatized under any circumstances, but emphasized that the plant must be made profitable. He highlighted the state government’s support for VSP, including its removal from the Board for Industrial and Financial Reconstruction (BIFR) list, a massive ₹12,000 crore investment after the 2024 government change, and converting ₹2,000 crore in unpaid electricity bills into equity. Additionally, the state waived property tax dues to provide financial relief. The CM urged employees to maximize efficiency and help turn the plant into a profitable enterprise once again.

Sharmila alleged that the government was intentionally weakening VSP. She cited reductions in the workforce from 30,000 to 18,000, cuts in critical raw material supplies, and other measures that, she claims, reduce production capacity and undermine the plant’s operations.

VSP, one of India’s most prominent steel plants, faces a financial crisis, with debts exceeding ₹20,000 crore. Annual interest payments alone range from ₹1,300 to ₹1,500 crore, making it difficult for the plant to recover even when it posts profits. These financial pressures have renewed discussions about privatization at the central level.

The central government argues that private investment is necessary to modernize and sustain VSP. However, employee unions, local communities, and political parties strongly oppose privatization, citing concerns over job security and social welfare cuts. Experts suggest that assigning VSP its own iron ore blocks, coupled with some investment and debt restructuring, could help the plant return to profitability without privatization.

As the debate continues, the future of VSP remains a central political and economic issue in Andhra Pradesh.