A high-level professional team deputed by Steel Authority of India (SAIL) is all set to replace J K Singh and Rita Singh of the beleagured Mesco group at the helm of the management of the Rs 740-crore steel project being set up by the company in Orissa.
The Industrial Development Bank of India (IDBI), lead bankers to the project, has initiated the process of change of guard in the project management and obtained the powers of attorney of the Singh couple in this regard.
On the request of IDBI, the Union steel ministry has agreed to depute a senior officer of SAIL, B R Satapathy, executive director, raw material division, as the chief executive officer of the project.
The steel plant coming up under the banner of Mideast Integrated Steel LTD (MISL) at Duburi in Jajpur district appears to be jinxed. Despite completion of over 90 per cent of the project work, the venture has been unable to see the light of the day for last seven years. The plant intended to produce 0.6 million tonne of pig iron in the first phase.
Meanwhile, a techno economic feasibility (TEF) report of the project prepared by Mecon put the additional fund requirement for completion of the project at Rs 130 crore. The report said the balance work of the project could be completed in 18 months if the funds are made available.
"Due to delay in implementation, the interest burden of the project has gone up", said S.K.Chakravarti, chairman of IDBI, who was here to discuss with the state government on the issue of change in the MISL management. He said the additional interest burden could be converted into equity and also sought financial support of the state government to enable the new management deliver goods.
Chakravarti said though the Jindals have shown interest to take over the MISL project, IDBI is keen to see that the plant is first made operational before being handed over to any prospective buyer. The IDBI chief said his organisation has sanctioned additional equity to the tune of Rs 50 crore to Nilachal Ispat Nigam Ltd (NINL), which is setting up a Rs 1525 crore one million tonne pig iron plant also Duburi.
The Metals and Minerals Trading Corporation (MMTC), the co-promoters of the project, has also contributed a similar amount to the equity. However, he said, there is still a gap in tying up the funds and efforts are on to arrange the requisite money.
Meanwhile, sources said, IDBI has filed a case in the recovery tribunal at Cuttack for recovery of loans given to beleagured Indian Charge Chrome Ltd (ICCL) and Orissa Industries (Orind). A loan of Rs 400 crore given to ICCL is considered as a NPA by the financial institution.
