Wednesday, April 24, 2024

VSP faces power crisis amidst privatisation push

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Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant (VSP), is encountering significant operational challenges due to a critical electricity shortage. This development coincides with ongoing discussions concerning the potential privatisation of the plant.
VSP, historically known for its surplus electricity generation, is currently experiencing an acute coal shortage, hindering its self-sufficiency in power production. The plant requires 418 MW for full operation. However, insufficient coal supplies from Mahanadi Coalfields Limited (MCL), a subsidiary of Coal India, have severely curtailed its power generation capacity. This shortage has triggered a financial strain. Electricity bills have skyrocketed from Rs 20 crore to a concerning Rs.90 crore per month, jeopardising RINL’s financial health.
The announcement of VSP’s privatisation has emerged as a potential factor influencing the disruption in coal supply. The plant’s financial difficulties have resulted in threats of power disconnection by the Eastern Power Distribution Company (EPDCL). To manage the immediate crisis, RINL has resorted to measures such as deferring salary payments for its officials. Both RINL and the government are facing scrutiny for their inability to secure a consistent coal supply and address the plant’s financial well-being, particularly considering existing contractual agreements with MCL.
Industry experts and worker unions are urging for swift intervention to safeguard VSP’s future. The potential closure of the plant has intensified calls for a unified effort to prevent this critical industrial institution from collapsing. The situation remains fluid as stakeholders grapple with the complex interplay of energy supply, financial stability, and privatisation dynamics, all of which will shape the future of VSP and its role in the regional and national economy.

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