The Hindu Business Line : Industry upbeat on Tata Steel's expansion

TRADE and industry in and around Jamshedpur are excited and upbeat with Tata Steel announcing its plans to augment steel-making capacity at its existing plant in Jamshedpur to 10 million tonnes annually by 2010 with an estimated investment of Rs 11,000 crore and also set up a greenfield project of 12 million tonnes a yearcapacity possibly in the Saraikela-Kharswan region entailing a further investment of Rs 42,000 crore.

The expansion plans of the steel major are expected to provide direct and indirect employment to thousands of people even as the size of the skilled human resources pool is set to grow. Besides providing the required fillip to the State Government's training efforts, Tata Steel might also set up its own training facilities to enhance the "employability" of people in the State, according to official sources at Tata Steel.

Besides intensifying its corporate social responsibility (CSR) initiatives in existing areas under the umbrella of the Tata Steel Rural Development Society, the steel major's CSR activities will be extended to new areas in tandem with the company's expansion plans. "We will contribute to the rehabilitation plans for those people who might be displaced on account of land acquisition for the greenfield project," the sources said. The focus will also be on augmentation of the social infrastructure in and around Jamshedpur by the setting up of educational institutions and housing, healthcare and recreational facilities.

With the steel sector accounting for a high multiplier effect, there is a high degree of enthusiasm — and expectation — among traders as well as medium, small and tiny ancillary units. Among those who are upbeat on the development and growth prospects include members of Singhbhum Chamber of Commerce and Adityapur Small Industries Association, who together comprise a sizeable chunk of the vendor base of Tata Group companies in Jamshedpur, such as Tata Steel, Tata Motors, The Tinplate Company of India Ltd, TRF Ltd, Tata Rayerson, Tata Pigments, and Tata Korf.

On its part, Jamshedpur Utilities & Services Company Ltd (JUSCO), the erstwhile town division of Tata Steel, has been managing the city's civic and allied services such that Jamshedpur has been recognised as a model city not just in India but globally. Jamshedpur has been selected as one of the cities for the Global Compact Cities Pilot Programme by the United Nations. In fact, it is the only South-East Asian city to be selected on this score.

Says Mr Vijay Mehta, Past Chairman of Confederation of Indian Industry (CII), Bihar, Founder Chairman of CII, Jharkhand, and presently Member of the National Council of CII: "The demand for steel is expected to grow steadily over the years. Capacities will be generated but the timeframe of their being set up and their locations may undergo changes.

Jamshedpur being a well-developed city will always be under pressure from senior executives who would wish to live here. The need of the hour is to set up satellite townships with appropriate social infrastructure such as schools, hospitals, etc".

According to him, it would be imperative to build an "enormous network of road and rail linkages" to facilitate movement of raw materials and finished products to and from the steel plants. Enhanced economic activity would lead to an increase in the population ofJamshedpur thereby increasing the pressure on housing. Under the circumstances, it would be extremely important for the State Government to oversee that urban development is pursued in a planned manner and it is not left to those who are out to make a quick buck. "Prosperity and growth of the region will change the socio-economic demographics here and Naxalite activity will vanish over time," feels Mr Mehta.

Mr Nirmal Kabra, Immediate Past President of Singhbhum Chamber of Commerce feels the State Government must deploy all the resources at its command to facilitate development of appropriate infrastructure in the region. He is optimistic that the new investments planned by steel majors will see the coming into being of "at least 200 new medium, small and tiny ancillary units" in the region. Already, there are over 1,000 such units whose fortunes are directly or indirectly linked to the Tata Group.

According to Mr Kabra, Jamshedpur needs to be linked by air with all major cities in the country. "If infrastructure and logistics issues are addressed effectively and appropriately, Jamshedpur can well achieve the distinction of being India's No. I industrial city," he says.

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