Millennium Post

SAIL, NMDC, RINL to set up basic infra for $40-bn projects

SAIL, NMDC, RINL to set up basic infra for $40-bn projects
State-run iron ore miner NMDC was earlier given the task of putting in place basic infrastructure, including land acquisition for the plants, each with 10-12 million tonne capacity, in Chhattisgarh, Jharkhand, Karnataka and Odisha.

‘Now, with the slow progress in readying the necessary and basic infrastructure including land acquisition, government has decided to devise the job to SAIL and RINL as well,’ said a source in the Steel Ministry.

‘It has now asked SAIL to develop the special purpose vehicle (SPV) in Chattisgarh, and RINL the Odisha SPV. NMDC would do in Karnataka and Jharkhand,’ he said.

As per the proposed plan, SAIL, RINL and NMDC would tie up with state industrial development corporations for forming SPVs that would create the infrastructure for such ultra mega steel plants. It generally requires $1 billion investment for creating 1 million tonne steel capacity.

The idea for developing basic infrastructure through SPVs was first mooted by the previous government against the backdrop of two global players, Posco and ArcelorMittal, pulling out of their mega steel projects.

The plan was that after developing the infrastructure, NMDC will sell it off to steel firms who intend to set up shop in India, but have been deterred by bottlenecks.

It aimed at clearing the bottlenecks for private projects as a step towards achieving 300 MT capacity
by 2025, a target set by the then Prime Minister Manmohan Singh-led National Manufacturing Competitiveness Council (NMCC). NMDC, which is setting up a steel plant at Nagarnar in Jharkhand, has already started doing its bit at the site of its now discarded joint venture project with Russian steel firm Severstal in Karnataka.

NMDC had in 2010 signed a deal to form a joint venture with the Russian steel maker to set up a 3 MTPA steel plant.

It is already in possession of some parcel of land, besides clearances from the environment and forest departments.

It is estimated that at least 85 MT capacity creation in the country has been delayed for want of water, environment and forest clearances. Non-availability of the land is the primary hurdle though.

Tying up with Industrial Development Corporations would also help SPV to secure land and create other necessary infrastructure without facing much hurdles. IDCs will have some stake in the SPVs.

‘The preferred mode of land acquisition would be through outright purchase from landlords. The SPVs would also be responsible for making necessary arrangements for land, water linkage, raw material linkage and all statutory clearances. These SPVs may be recognised as PSUs,’ the source said.

Once the clearances and linkages are in place, the shell companies would be offered to the project developers in a transparent way for putting up steel plants, he said.

‘In case, there are no buyers, SAIL and RINL would be most likely to retain them and develop projects on the prepared pitch,’ the source said, adding that NMDC would look for outright sales of both the proposed SPVs to the interested steel firms.
PTI

PTI

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