State to review status of steel projects next month

Its time for the steel players who have entered into MoU (Memorandum of Understanding) to pull up their socks and brace themselves to present the latest report on the status of their projects as the state steel and mines department plans to review these projects next month.

As many as 50 steel players have entered into MoUs with the state government and the fate of the non-serious players is at stake as the steel and mines department is likely to take a stringent view of such players during the review meeting.

"We are planning to review the status of all the proposed steel projects next month. The review will make an assessment of the actual progress made by the companies and the milestones achieved by them. Based on the headway made by the projects, the decision to renew or scrap MoUs will be taken”, a top official of the state steel and mines department told Business Standard.

Investments to the tune of Rs 50,325.77 crore have been grounded in the steel sector (as on March 31, 2010). Thirty out of 50 MoU signed companies have gone into partial production, achieving a steel production capacity of 7.79 million tonne per annum (mtpa) and generating 1062 MW through their Captive Power Plants (CPPs).

Orissa had attracted investments worth Rs 2.13 lakh crore in the steel sector with an envisaged capacity of 77.16 mtpa.

The last review meet of the steel plants was conducted on May 28-29 this year. During the last review meeting, the steel and mines department had tightened the noose on four non-serious steel players who have made unsatisfactory progress on their proposed projects in Orissa after entering into MoUs with the state government.

Atha Mines Private Ltd, BRG Iron & Steel Company Ltd, Tecton Ispat Private Ltd and Deepak Steel & Power Ltd have faced the wrath of the steel and mines department for being non-starters.

The state steel and mines department is contemplating to renew the MoUs of 10 companies including Posco India and has assured to extend all possible help to overcome the hurdles on their projects.

While extending the MoUs, the state government will insert two clauses for these steel units namely offering employment to locals and setting up of Industrial Training Centres (ITCs) by these companies.

In the last review meeting, the steel and mines department had expressed concern over the sluggish pace of project execution by three companies- ArcelorMittal, Essar Steel and Uttam Galva Steel. ArcelorMittal's proposed 12 million tonne per annum (mtpa) steel plant to be set up at a cost of Rs 40,000 crore, one of the big ticket investments in the state has been a non-starter so far.

The world's largest steel maker which has planned to set up the mega steel plant spread over 7000 acres of land at Patana in Keonjhar district has been unable t acquire even a single acre of land.Similarly, Essar Steel has acquired only 200 out of 2500 acres needed for its six mtpa steel plant.Uttam Galva which is setting up a three mtpa steel plant at Duburi in Jajpur district has acquired only 300 out of 2000 acres needed for its project.

The company is also lagging in terms of actual investment made at the ground level as only Rs 60 crore has been invested out of the total project cost of around Rs 8000 crore.