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| Karnataka approves Tata Metaliks plan for steel plant |
| Mahesh Kulkarni / Bangalore Sep 03, 2009, 16:13 IST |
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Tata Metaliks Ltd, a manufacturer and supplier of pig iron, has received the Karnataka government’s approval for its revised proposal to set up a 3 million tonne per annum (MTPA) iron and steel plant in two phases in Haveri district of North Karnataka.
The investment is estimated at Rs 6,101 crore, of which Rs 2,033 crore will be put in by the promoters and Rs 4,067.6 crore will be arranged through term loans. Currently, the company has a debt of Rs 300 crore. It operates five furnaces with an annual capacity of 650,000 tonnes.
“The company had earlier planned to establish an iron and steel plant of 700,000 tonne per annum at an investment of Rs 984 crore. However, they came up with a revised proposal to expand their capacity to 3 MTPA. The state high level clearance committee has approved the proposal with several incentives and tax concessions,” Murugesh R Nirani, minister for medium and large industries, Karnataka government, said.
He added the government has also agreed to give stamp duty exemption, electricity tax exemption for captive and power supply for 10 years from Karnataka Power Transmission Corporation Ltd, 50 per cent of the cost of an effluent treatment plant and 100 per cent of the cost of a water supply scheme.
In addition to this, the government has agreed to provide a soft loan at 1 per cent towards value-added tax for 10 years. Entry tax exemptions for 10 years on plant and machinery and all inputs, such as raw materials and consumables as well as exemption of royalty on water, he said.
A Tata Metaliks spokesperson said: “We are happy that the Karnataka government has approved our proposal and our board will soon meet to work out the details of the project’s commencement date.”
The plant will be spread over an area of 900 acres in Ganajur, Devagiri and Yallapura villages of Haveri district. The state high level clearance committee has recommended to the Karnataka Industrial Area Development Board (KIADB) to acquire land on consent basis from the lawful land owners with a condition to submit consents for minimum 70 per cent of total extent of land proposed for the project to KIADB before it initiates acquisition.
The project will draw 56 MLD (million litres per day) of water from Tungabhadra and Varada rivers. The state has also sanctioned 166 MVA of power required for the project.
Apart from these concessions and incentives, the company has sought some other incentives from the state government, like grant of a captive iron ore mine with a mineable reserve of 320 million tonnes, railway siding facility, right of way for water pipeline and power transmission, a road up to the plant site, a railway line between Kotturu and Harihar and berthing facility at Karwar and Mangalore ports.
“We will provide all possible incentives as per the state’s industrial policy in order to help the company set up their plant,” Nirani added.
For the year 2008-09, Tata Metaliks reported a turnover of Rs 1,106 crore and a loss of Rs 149 crore due to currency fluctuations and a pile up of inventory. During 2009-10, it projected a growth of 66 per cent in its top line and a net profit of Rs 100 crore.
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