Rashtriya Ispat Nigam (RINL), one of the country’s leading steel producers, is in disarray due to differences within the board over negotiations with a private port for logistics.
Going by sources, some of the directors, particularly independent directors, are not happy with the way the board is negotiating with Gangavaram Port (GPL).
Dr Jagat Pal, a former IAS officer and an independent director, has recently sent in his resignation to the steel ministry.
U P Singh, another independent director and also a former IAS officer, had quit in December.
RINL, which operates the Visakhapatnam Steel Plant (VSP), has been using the Vizag port maintained by the Visakhapatnam Port Trust (VPT) for all its logistics needs.
However, VPT has lately been facing competition from the new port that has come up at Gangavaram near Vizag, with the private company’s promoters trying to lure its clients away.
RINL had set up a sub-committee to negotiate the rates with GPL.
However, documents available with DNA Money suggest “tremendous outside pressure” to finalise a deal of more than Rs 6,200 crore with GPL by withdrawing work from VPT, which is under the ministry of shipping, despite written opposition from the chairman of VPT and the secretary, ministry of shipping.
The controversy, according to sources, is over the costing worked out with GPL and inclusion of various charges including demurrages at the port.
Some independent directors have also been opposing the agreement with GPL, which does not have a clear exit clause. The directors are keen on having an agreement for three years instead of 15 years.
“Now it is up to the steel ministry to intervene and settle the issue. The independent directors feel that a private port is being arbitrarily benefited in the process. VPT, a government port, should not lose the advantage it has and the directors are keen on a better coordination between two government arms —- ministry of steel and the ministry of shipping,” a source tracking the developments said.
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