The Hindu Business Line : Progress in ongoing steel projects coming to a halt

New Delhi, Dec. 11 The big players of the Indian steel industry appear to have virtually given up on their target to achieve a combined capacity of over 85 million tonnes (mt) of finished steel by 2011-12.

An analysis of their activities suggests that they are not pushing ahead with their expansion plans. But no one is willing to admit this officially.

According to senior official sources in the Ministry of Steel, there had been no progress in the major steel projects during the last two to three months.

“In case of new greenfield projects where State Governments are involved things have come to a standstill. For brownfield expansions the companies are delaying implementation as most of them are being compelled to renegotiate with lenders,” the official said.

According to available indication only the two public sector companies SAIL and RINL may be able complete their expansion plans with the shortest delay.

A cross-section of officials in various steel companies told Business Line that it has become difficult for steel companies to raise funds.

“Even the chief executive of the most profitable private sector steel company has told the Minister in a high-level meeting that he is unable to raise funds for his projects,” an official in the Ministry who was privy to the meeting said.

The problem is getting compounded because there is a squeeze on suppliers credits too, the official pointed out.

The information available shows the following features:

TATA STEEL: As per updates provided by Tata Steel to the Ministry, expansion of Jamshedpur plant is on and the company has also obtained environmental clearance. Some of the lands acquired for its greenfield project in Kalinganar are under encroachment. Though the detailed project report has been completed efforts to remove encroachers have slowed down. Also, there is no significant progress in the company’s proposed new plants in Chhattisgarh and Jharkhand.

ESSAR STEEL: Expansion of the Hazira plant is undergoing. For the greenfield project at Paradeep in Orissa the company has acquired 151 acres and there is no progress after that. For the proposed plant at Dantewada in Chhattisgarh land acquisition notices had been issued and prospective licences for Bailadila deposit No 3,6,7 and 9 iron ore mines have been obtained. However, there is almost no progress with the company’s plans in Jharkhand.

JSW STEEL: Expansion in the company’s Vijaynagar plant is undergoing. The company has acquired 3,800 acres of Government land for its greenfield project in West Bengal and foundation stone has been laid last month only. However, the company’s Jharkhand project continues to remain under planning stage only.

JINDAL STEEL & POWER: The company has acquired 200 acres for expansion of it Raigarh plant in Chhattisgarh. It has also acquired 1,700 acres for greenfield plant at Angul in Orissa and another 600 acre in Jharkhand. Though environmental clearance and water supply approvals for both the projects have been obtained the company is currently focussing more on international opportunities, sources said.

ISPAT INDUSTRIES: Expansion of its Dolvi plant in Maharashtra is on but sources said that the company is going slowly on it because of market slump.

POSCO: Though about 200 acres of Government land has been sanctioned and forest clearance obtained land is not under possession. Meanwhile, environmental clearance and Costal Regulatory Zone clearance for construction of port have been obtained long ago but no progress since then.

ARCELLORMITTAL: Only the lands have been identified at Keonjhar in Orissa and Torpa-Kamdar in Jharkhand. Has received a small iron ore mining block. The company has already reported increase in project cost from Rs 50,000 crore to Rs 80,000 crore.