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To raise the country’s steel manufacturing capacity to 145 million tonnes by 2015-16 to meet the growing demand and curb imports, a Steel Ministry panel has proposed “Ultra Mega Projects” citing delays in multi-billion dollar ventures of ArcelorMittal and Posco due to regulatory and land acquisition hurdles.
Each Ultra Mega Steel Project (UMSP) to be built on a fast track basis using super critical technology on the pattern of Ultra Mega Power Projects (UMPPs) may cost Rs 50,000 crore.
The Steel Ministry has raised concerns over rising imports that grew seven-fold in the decade to about 10 mt at present.
The Joint Plant Committee appointed by the Ministry has favoured setting up of plants having a capacity of 10 mt per annum during the current fiscal, a Steel Ministry official in the know of the development has told PTI.
“India will need 145 mt steel capacity by 2015-16, almost double the present, which is not possible through expansion of brownfield projects that will reach limit in three to five years,” the official said.
India at present has a capacity to produce about 78 mt.
New projects like ArcelorMittal are still to take off. Under the circumstances, the committee headed by the Joint Secretary of Steel, Mr U.P. Singh, has stressed the need to set up 10 mt UMSPs each in Jharkhand, Orissa, West Bengal, Chhattisgarh and Karnataka.
Apart from preferring proximity to raw material rich states, it has also suggested setting such plants in brownfield sites like Bokaro Steel Plant of Steel Authority of India Ltd or Rashtriya Ispat Nigam Ltd, Visakhapatnam, sources said.
A final call on the recommendations, submitted to the Steel Secretary, Mr P.K. Misra, is, however, yet to be taken.
Advocating the creation of UMSPs, the Joint Plant Committee has said that land acquisition was proving to be the biggest hurdle for new ventures and there was a need to expedite capacity creation through the new route.
“Land acquisition has proved to be the single most important problem in creation of greenfield capacity as a large number of steel projects have been stalled on this count,” the committee said in its recommendation.
Its members said ArcelorMittal, which has proposed Rs 1.3 lakh crore projects in Jharkhand, Orissa and Karnataka, has not been able to acquire any land in Bokaro and Keonjhar and has made little progress in Bellary.
Likewise, the proposed Rs 54,000-crore Posco project in Orissa has been awarded only land lease by the Government but progress is awaited. Similarly, Tata Steel has been able to acquire only partial land for its various projects.
The Joint Plant Committee, the sources said, also cited how imports rose sharply from 1.4 mt in 2001-02 to about 10 mt at present with steel demand growing at the rate of 8-10 per cent against 6-8 per cent growth in production.
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