The Steel Minister, Mr Beni Prasad Verma, has expressed displeasure over the pace of modernisation at the public sector Steel Authority of India Ltd.
“The pace of modernisation at SAIL is a cause for concern. I am not happy with it and they need to step up production immediately,” Mr Verma, who was elevated to the Cabinet rank in Tuesday’s ministerial reshuffle, told reporters today.
SAIL is undertaking a massive modernisation plan of its plants at Burnpur, Rourkela and Bhilai with an estimated cost of Rs 72,000 crore. When completed by the end of 2012-13, the modernisation would result in a capacity expansion of crude steel output from 14 million tonnes per annum to 24 mt per annum, said Mr C.S. Verma, Chairman, SAIL.
“We expect to commission two blast furnaces in Rourkela by January 2012 and trial runs at the Burnpur plant would commence by the year-end,” Mr Verma said.
The modernisation of 100-year-old IISCO-Burnpur plant with a capacity of 3 mt per annum has seen an estimated cost overrun of Rs 2,000 crore. The Burnpur plant was supposed to commence operation by June 2011 and is now delayed by about six months.
Mr Verma attributed the delay to the unexpected molten debris at the plant site, which expanded the scope of work of the modernisation project. Reacting to the Minister’s displeasure, Mr Verma said “the expectations are high and we are trying to meet them”.
SAIL scrip was trading 1 per cent up in the intra-day trade at Rs 131.60 on the BSE.
The Steel Secretary, Mr P.K. Mishra, said the holding structure of the proposed joint venture of SAIL with the South Korean steel maker Posco would be finalised only after the detailed project report is complete.
SAIL had signed a MoU with Posco last year to set up a joint venture that would use the Korean firm’s FINEX technology to produce steel using iron ore fines and non-coking coal.
“We will decide the joint venture equity structure, once the negotiations are complete,” Mr Mishra said.
Responding to a query on SAIL’s follow-on-public offer, Mr Mishra said the issue would be launched depending on the market conditions. “The moment the market stabilises, we will go for the issue. We are in a readiness to go for the issue,” he added.