SAIL's move to initiate financial review of the proposed processing unit in Srinagar has drawn criticism from the Parliamentary Panel. SAIL's decision was prompted by change in market conditions and benefits from the State Government.

In 2008, SAIL had planned to set up a steel processing unit (SPU) with an annual capacity of one lakh tonnes in Pulwama. The proposed unit was to cater to the local demand of TMT bars and galvanised corrugated sheets.

“Uncertainty looms large over setting up a SPU in Srinagar. SAIL is slated to be wary of its viability and is not sure of getting concessions and benefit from the Government of Jammu and Kashmir and has therefore, initiated financial review of the project,” noted the Parliamentary Standing Committee on Coal and Steel.

The panel felt that “review at this stage was surprising as all apprehensions and doubts would not have been ignored when this project was conceived and ultimately approved”. It also sought to know the reasons for fresh review.

The Steel Ministry has told the panel that SAIL has undertaken a fresh financial review of the project, which has become uneconomical in the absence of concessions and benefits from the State Government.

After it was found out that the land initially offered to SAIL was uneven, the PSU was re-allocated land in October 2009. The company was to initiate a fresh soil investigation in January 2010. However, it could not be undertaken due to the prevailing unrest/social environment in the region, the Steel Ministry told the panel.

The decision of implementation of the project is dependent on improved market scenario, availability of various concessions and benefits from the J&K Government and improvement of social environment in the region, the Ministry said.

However, the Ministry said that work at SPU in Kangra is expected to be completed in January 2012 as scheduled.

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