Visakhapatnam,  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.

"From the government side, we will give permission for land use conversion without any objection as this matter falls under the state government's purview," said Reddy.

He said the land parcels could be turned into plots, enabling the steel plant to sell them and use the proceeds to salvage the plant.

"If we do these things, there will be no need to give the plant to private entities and retain it within the government to turn it into a healthy institution," said Reddy.

The Chief Minister also said that it has already been 10 days since he wrote the letter but he is yet to receive a reply. He expressed hope that he would receive a reply soon and called for the local BJP leaders to support him.

Meanwhile, he pleaded with the plant's employees not to strike work and called upon them to run the plant better than ever before.

"Do not let others accuse that the plant has stopped and no material is being produced. Support the plant in all ways to not reduce production," he said.

However, Reddy admitted that the state government has no powers on the steel plant as it is a Central government institution. "Let us all unite and work to change the minds of the people in Delhi in our favour. The state government is honest about protecting the steel plant," he noted.

The CM also said that many people are talking in myriad ways about South Korean Posco company's interest in investing in the state.

He confirmed that Posco executives had visited the state and also met him, but they were actually appraising about locations in Kadapa, Krishnapatnam and Bhavanapadu for their investment plans.

"It is not correct to say that Posco is trying hard to come to Visakhapatnam. It is okay if they come to Krishnapatnam, Bhavanapadu and Kadapa, as more people will get jobs and the economy will improve," he observed.