The decision to privatize the Visakhapatnam Steel Plant (VSP) was taken by the Cabinet

Committee on Economic Affairs in January 2021. The primary reason cited for
privatization was the huge losses incurred by the plant over the years

Here are some key points regarding the Vizag Steel Plant and its privatization:
1. Historical Significance:
o The establishment of Rashtriya Ispat Nigam Ltd (RINL), the corporate entity of VSP, was
the result of a prolonged political and public movement.
o People demanded the setting up of the plant in Visakhapatnam, leading to protests and the
loss of lives during agitations.
o Finally, the government agreed to establish the first shore-based steel plant in the country in
Visakhapatnam.
2. Flaw in Inception:
o Despite its significance, VSP faced a major flaw from the beginning: it was not allotted
any captive mines to supply iron ore (the raw material for steel production).
o As a result, the plant had to buy iron ore from the open market, affecting its cost structure.
3. Decline and Challenges:
o Over time, VSP encountered mismanagement, large-scale corruption, and an utter
apathy by the ministry in curbing losses when they were manageable.
o The plant incurred significant losses, not due to its failure to sell products, but primarily due
to internal issues.
4. Public Sentiment:
o VSP holds immense sentimental value for the people of Andhra Pradesh, who consider it a
symbol of pride.
o Protests and agitations have erupted against the privatization decision, with people from
various walks of life demanding a rollback.

While the privatization move aims to address financial challenges, it remains a contentious
issue, with strong resistance from various quarters