Mmtc Allowed To Proceed With Orissa Steel Project

The Rs 1,510 crore steel project of Nilachal Ispat Nigam has finally got off the blocks, with the Centre allowing MMTC, the lead promoter, to go ahead with the venture.

The cabinet committee on economic affairs last week permitted the public sector trading firm to invest Rs 100 crore in the equity of Nilachal Ispat, which envisages the setting up of a mild steel project at Duburi in Jajpur district.

This has come as a relief to the other promoters of the project, including the Orissa government, as the withdrawal of MMTC from the Gopalpur port project had cast doubts over its participation in the steel venture.

We are relieved and are looking forward to start the civil construction for the blast furnace, said Subrat Ray, the managing director of the company.

The Nilachal project has faced hurdles ever since its inception in the early 1980s. It also suffered due to the policy of the government adopted after the companys inception not to promote capital-intensive ventures like steel through public sector undertakings. There were difficulties in finding a suitable promoter and its approval, too, was delayed.

The project got a fresh lease of life with MMTC stepping in as the lead promoter and the Industrial Development Bank of India completing the appraisal late last year.

Of the total project cost, the debt component is Rs 910 crore and equity Rs 600 crore. The company is planning a public issue worth Rs 250 crore.

The company has already acquired about 2,050 acres for setting up the project. Payment of compensation is underway for another 450 acres it intends to acquire. The project is slated to go on stream in March 2000.