JSW Steel may go ahead with 12 mtpa Odisha steel project sans captive port

State govt is not keen to allow private players to build captive ports. Will instead award select sites via bidding for development as commercial ports

Sajjan Jindal-led JSW Steel might have to settle for its 12 million tonne mega steel mill proposed in Odisha without a captive port project. The port project, part of the steel maker's consolidated investment package, was considered key to its operations in the state. JSW Steel had pledged an investment of Rs 20 billion on the captive port, and had chosen Jatadhari Muhan, a site located 13 km from the limits of the major port at Paradip.

The Odisha government is not keen to allow private players to build captive ports. Instead, the government will award identified sites through competitive bidding so that they can be developed as commercial ports, said an official source in the know.

"In the case of JSW Steel, we are not in agreement with their idea of a captive port. What we can offer as an alternative to the company is a captive jetty. But, a decision on the captive jetty is not firmed up yet," the source added.

The Odisha government has roped in Mecon Ltd to study the feasibility of the captive port. Interestingly, Jatadhari Muhan was the same location where Posco chose to establish it's captive port project. The site despite located outside the limits of the Paradip port was then found unsuitable for port project due to environment and CRZ (Coastal Regulatory Zone) issues.

Vinod Nowal, deputy managing director at JSW Steel did not respond to calls nor replied to text message on his number.

JSW Steel's investment package in Odisha is valued at Rs 550 billion. Alongside the steel plant, the steel maker has sought to set up 900 Mw captive power plant, 32 million tonne pellet unit and a slurry pipeline to transport iron ore concentrates from Joda to the project site proposed near Paradip.

Land requirement for this project is assessed at 2,900 acres. The same patch of land that was once identified for a mega steel project proposed by Posco is supposed to be handed over to JSW Steel. The state government through Odisha Industrial Infrastructure Development Corporation (Idco) had acquired 2700 acres for the project later shelved by Posco.

The state government has approved allotment of 2900 acres in favour of the steel company. The land transfer is slated to be done in about two months.

JSW Steel has formed a wholly-owned subsidiary, JSW Utkal Steel Ltd, to fasttrack the implementation of its 12 million tonne crude steel plant and other inter-linked projects in Odisha. While the steel plant was initially proposed to be developed by JSW Steel, another group company JSW Infrastructure got the clearance to build the slurry pipeline. The company has requested the state government to transfer all clearances and approvals to JSW Utkal Steel Ltd.

Moreover, to secure iron ore supplies for its integrated steel project, the company has pitched for a long-term agreement for 50 years with state owned Odisha Mining Corporation (OMC) to supply 30 million tonne per annum of iron ore fines at IBM (Indian Bureau of Mines) declared price.