The Hindu Business Line : Ministry may form panel to look into steel cos’ problems

Facilitating supply growth: (from left) The Chairman and Managing Director of RINL, Mr P.K. Bishnoi; Director, SAIL, Mr G. Ojha; the SAIL Chairman, Mr S.K. Roongta; and the Executive Vice-Chairman & Managing Director, Jindal Steel & Power Ltd, Mr Naveen Jindal, during a meeting with the Union Minister for Steel, Chemicals and Fertilisers, Mr Ram Vilas Paswan, in the Capital on Monday.

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New Delhi, March 3 The Steel Ministry is likely to form a high level committee to look into the problems being faced by the domestic steel manufacturers even as it expects the domestic steel production be around 300 million tonnes (mt) by the end of 2019-20.

The Ministry’s earlier production target for the period was 200 mt.

“We will seek the Prime Minister’s intervention is addressing bottlenecks impeding fructification of additional capacities in the domestic steel sector. On the request of the steelmakers, we have decided to set up a high-powered committee for suggesting measures on implementing capacity expansions,” the Union Minister for Steel, Chemicals and Fertilisers, Mr Ram Vilas Paswan, told reporters after a meeting with the domestic manufacturers here on Monday.

As per Government estimates, the consumption in the last couple of years grew at around 13 per cent and the demand is further likely to grow by 14-16 per cent during the next few years, in view of the anticipated growth in infrastructure and manufacturing sectors.

“The production, however, is only growing by seven per cent each year and this is a cause of concern,” Mr Paswan said.

According to Mr Paswan, the problems that the industry is facing is on the acquisition of land, congestion at ports, getting speedy environmental clearances, allocation of mines and doubling of railway lines.

“A couple of the producers have also said that they are prepared to fund the extension of railway track for timely completion of the projects and the amount could be debited from the freight later,” he said.

The Minister also assured the steelmakers that the issues relating to ports and securing captive raw-material linkage will be taken up with the authorities concerned. He also said that among the issues obstructing capacity expansion is the question of land acquisition which is particularly high in Jharkhand.

“Other States like Orissa, Chhattisgarh and Maharashtra do have their share of problems, but the situation in Jharkhand is serious,” Mr Paswan pointed out.

The Steel Ministry had convened the meeting as it was concerned over the demand-supply mismatch in the steel sector, which has forced the imports to rise by around 67 per cent.

“The Government is making all-out efforts to facilitate supply growth by way of faster commissioning of envisaged steel projects — both brownfield and greenfield and we are confident of meeting the production targets. By 20011-12, the production level is likely to touch 124 mt, exceeding its demand, which is likely to be around 113 mt,” Mr Paswan said.

The Minister also expressed satisfaction on the announcements made in the Union Budget 2008-09 on the steel sector.

“The manufacturers have assured the Ministry that steel prices will comedown by about Rs 500 per tonne following a 2 per cent reduction in the Cenvat rates,” Mr Paswan said.

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