Chennai: Chief Minister K.Palaniswami has urged the Centre to reconsider its plan to privatisation of Salem Steel Plant since the State Government had given a package of incentives to the public sector unit.

In a letter to Prime Minister Narendra Modi on Thursday, Palaniswami said the State Government had supported the steel plant expansion project costing Rs 2,005 crore with a structured package of incentives in the form of soft loan, capital subsidy, electricity tax exemption and environmental protection subsidy.

“In 2015, the Government of Tamil Nadu granted an extension of one year from November 1, 2010 to enable Salem Steel Plant to complete its expansion activities and avail of the incentive package,” he added.

“Given the above context, where the establishment and subsequent expansion of the Salem Steel Plant have received so much support from the people and Government of Tamil Nadu, primarily on account of its public sector character, the recent news of the proposed privatisation of the plant by the Government of India has caused lot of apprehension and dismay among the people of the State,” the letter said.

“Land is perhaps the most valuable and sought after asset in the possession of Salem Steel Plant today,” it added.

According to Palaniswami, the state government had acquired about 15.5 sqkm in nine villages more than four decades ago in the foot hills of Kanjamalai in the district.

“It was possible to undertake such extensive land acquisition mainly because of the public sector character of the plant. Today, any proposal to privatise the Salem Steel Plant would cause considerable unrest amongst the people, particularly amongst those whose lands were acquired,” Palaniswami said.