Delhi-based Bhushan Steel’s cold rolling project at Sankrail in West Bengal appears to have hit a roadblock as land prices have hit the roof.
Of a total requirement of 100 acres, the company has purchased 90 acres along the National Highway-6 directly from land owners at a cost of Rs 1-1.5 crore an acre. Bhushan sources said, the land owners were asking for 10 times the price for the balance land.
Bhushan Steel wants to put up a 0.5 million tonne cold rolling (CR) and galvanizing plant at Sankrail. The investment in the project would be Rs 400-500 crore, about half the original investment.
Bhushan sources said, “We had earlier thought of producing auto grade steel, but with the Nano pullout we have decided to stick to steel for roofing. Initially we thought of manufacturing auto grade steel, as we felt other auto players would follow Nano and there would be a demand for the product.” The company is hoping that the land pricing issue would be sorted over the next two months. Right now, the boundary wall is being constructed for the land that has been acquired for the project.
It’s not just Sankrail, Bhushan Steel is also facing a stumbling block in its six million tonne steel plant project in the Asansol-Durgapur belt area of Bardhaman. Coal India raised objections to having industrial projects in the area as it was said to be coal bearing. Sources said, a meeting was scheduled for April 16, where the issue would be thrashed out.
Bhushan’s investment in the project would be around Rs 20,000 crore. The delay in the project had held up talks with Japan’s Sumitomo Metal Industries. The agreement with the West Bengal for the two projects was signed in 2007.
Sources indicated that if a written assurance was not handed out by the Bengal government over the next two months, the company would embark on the same project in Karnataka.
Bhushan Steel has already realigned 300-400 acres of the site in Bardhaman.
However, Coal India was yet to give a clean chit to the project.
“Sumitomo is keen to partner with us, it doesn’t matter to them whether its Bengal or Karnataka,” said sources.
Sumitomo was keen on picking up a 26-40 per cent stake in the project. A team from Sumitomo has visited the site.