The Hindu Business Line : Ministry to monitor SAIL, Vizag Steel expansion projects

New Delhi, July 24 The Government is worried about any delays in the expansion of public sector steel units — Steel Authority of India Ltd (SAIL) and Rashtriya Ispat Nigam Ltd (RINL).

“Last week, the Parliamentary Consultative Committee of the Steel Ministry met to take stock of the status of the expansion programme of RINL. The members cautioned the company that there should be no cost and time overrun in implementing the expansion programme,” an official in the Steel Ministry told Business line.

According to the official, the members were not only concerned about RINL’s expansion programme but also that of SAIL.

Avoiding delay

“Though at the moment there is no delay in the expansion programmes of both the companies, given the history there have been delays in project executions. So to avoid this, since there is a cost attached to any delay, the Ministry would be monitoring both the expansion projects very closely,” the official added.

Both SAIL and RINL have initiated major expansion plans. RINL’s expansion plan involves a capital outlay of Rs 8,692 crore to raise its capacity to 6.3 million tonnes (mt) from the current 3.4 mt, which needs to be completed by February 2010.

SAIL is implementing an expansion programme to raise its capacity to 24 mt from the current 14.6 mt with an investment of over Rs 40,000 crore, which is expected to be completed by October 2010.

Review

According to the Ministry estimates, a six month delay in the expansion project of SAIL could see an additional investment of Rs 2,500 crore, while in the case of RINL a one year delay could see additional investment of over Rs 1,000 crore.

It is proposed that review be conducted at the secretary-level on a monthly basis and the ministerial-level on a quarterly basis. The Ministry also proposes to send a team of officials to visit the plants so that ground level problems can be looked into.

“Generally, at a review meeting only the top-bosses are present or at the most the head of the plant. So the complete picture on the problems, which might be faced at the ground level might not be placed at the meeting, so to address this issue officials would be undertaking visits to the plants of SAIL and RINL,” the official said.

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