Business Standard

Steel projects remain on paper in Karnataka

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A year after GIM, little progress in realising investment from steel majors

The Karnataka government, which attracted global steel majors a year ago, has seen little progress in realising their investment. One year after holding the global investors meet (GIM) in June 2010 the progress in securing clearances for the iron and steel projects, which constituted more than half of the investment proposals, is negligible.

The state had signed MoUs with large steel companies like ArcelorMittal, Posco, Tata Metaliks, JSW, NMDC, Adhunik Metaliks, and Hazira Steel Limited among others for setting up steel mills with a total capacity of 45 million tonne per annum (MTPA) at a combined investment of Rs 2.53 lakh crore.

While the B S Yeddyurappa-led government left no stone unturned to give clearances on its part, many projects are still on paper and held up due to issues of land acquisition and central clearances for mining leases among others.

“We have already recommended to the Centre for allotting mining leases to six steel companies like Arcelor Mittal, Posco, JSW, Bhushan Steel, Surya Roshni and KIOCL Ltd. It is now up to the Centre to give the clearance,” Murugesh R Nirani, minister for large and medium industries, told Business Standard.

Of the 389 MoUs signed by the government, 27 projects have already been completed and commissioned, involving an investment of a little over Rs 2,000 crore, which is less than 1 per cent of the investment committed during the GIM last year. Another 218 projects are in their various stages of completion, he said.

The state government is in the process of giving water linkage for many of these steel projects. “We have 170 tmc ft water available from Krishna tribunal, of which 10 per cent would be allocated for steel projects,” Nirani said.

As far as the big-ticket steel projects are concerned, the state government has achieved considerable progress in terms of land acquisition for ArcelorMittal. The government has already acquired close to 2,000 acres in Kuditini village in Bellary district. The company has so far deposited Rs 260 crore for the purpose.

Korean steel giant recently identified land in Ron taluk of Gadag district for its 6 MTPA steel plant. The Karnataka Industrial Area Development Board (KIADB) has issued preliminary notification for acquisition of 3,000 acres for this project. Surya Roshni has selected Bagalkot for its 6 MTPA integrated steel plant with 500 Mw captive power plant at an estimated investment of Rs 24,000 crore.

Bhushan Steel Limited has identified land in between Bagalkot and Koppal for its 6 MTPA steel plant with 600 Mw co-gen project at an investment of Rs 27,928 crore. has selected Haveri district for its 3 MTPA integrated steel plant at Rs 15,000 crore. The preliminary notification has been issued for this project, Nirani said.

“We are hopeful that most of these steel projects will materialise in the next four years to five years. We are satisfied with the progress achieved so far in these projects. In another six months at least one of the projects will see start of civil work,” he said.

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