SAIL halves investment plans for Sindri

State-owned SAIL has slashed its proposed investment by almost half to about Rs 35,000 crore for setting up a steel plant along with a urea unit in Jharkhand.

"We are now proposing to invest Rs 32,000-35,000 crore at Sindri plant of Fertiliser Corporation of India," SAIL Chairman C S Verma told reporters at the sidelines of Assocham Steel Summit here.

The country's largest steel producer proposes to set a 5 million tonnes per annum (mtpa) steel plant along with 1.15 million tonnes urea plant at about 6,500 acre land of Sindri, the sick steel plant in Jharkhand, which is locked out since March 2002, he said.

The trimmed proposal is in contrast to its earlier plans of setting up a 12 mtpa mega steel plant along with a urea unit, which would have cost the company about Rs 70,000 crore. Sources said that SAIL did not find this proposal commercially viable and decided to trim the scale of the project.

"Feasibility report on the (newly)proposed plants would be complete in about next 2-3 months. After that we will take a view on filing the proposal to Fertiser Ministry", he added.

The Fertiliser Ministry had earlier rejected SAIL's proposal for setting up the plant saying it should first commit on setting up the urea units. Also, it asked SAIL to submit a revised proposal.

When asked if SAIL was talking to fertiliser PSUs for possible joint venture for the urea unit, Verma said, "We have no expertise in setting up Urea plants. We may look at that option."

Sources had earlier said that ArcelorMittal was in talks with the PSU for a possible JV to set up the steel plant there.

On the proposed alliance with South Korean Posco, Verma said, "a joint venture agreement could be signed in next two months."

SAIL is in talks with Posco to set up a 1.5 million tonnes steel plant at the land of its Bokaro Steel Plant. The Posco JV will be based on the global firm's finest technology, which uses iron ore fines and non-coking coal to produce high grade steel.

SAIL has an annual production capacity of 14 million tonnes, which it is working to increase to about 23 million tonnes by 2012 at an investment of Rs 70,000 crore.