Essar Steel signs supply pact with Konkan Railway

Essar Steel Ltd, the flagship company of the Rs 17,000 crore Essar Group, has signed a memorandum of understanding with the Konkan Railway Corporation Ltd (KRCL) for supply of steel plates for KRCL's prestigious sky bus projects to be executed in the country and abroad.

KRCL has agreed to source at least 50 per cent of its requirements of steel plates from Essar Steel for all the upcoming sky bus projects. KRCL is expected to execute 22 such projects over the next five years. This include seven projects in other countries.

"KRCL has received a letter of intent for a 17 km sky bus project in Goa. Initially, KRCL will lay a 1.6 km test track at Madgaon. This will be ready shortly. The initial lot of plates for the test track has already been supplied to KRCL by Essar Steel," Vikram Amin, executive director of Essar Steel, said on Wednesday.

Amin said now Essar Steel will be a preferred steel supplier with an assurance from KRCL to source minimum half of its steel plate requirement for the upcoming projects.

The steel plates may be manufactured at Essar's steel complex at Hazira, near Surat. The facility has a steel mill of 2.4 million tonne capacity integrated with the world's largest hot briquetted iron plant of 2.4 million tonnes capacity.

Essar may also take help from its 3.3 million pellet producing facility in Vizag which now has Stemcor of the UK as a joint venture partner.

"The plant now makes BF grade pellets and will soon manufacture DR grade pellets also. The technology for the plant has been sourced from Hitachi of Japan, and Ebner of Australia," said an industry source.

International standards maintained by Essar Steel will help the company supply plates for KRCL's global projects, the source said.

The projects that KRCL is bidding for and has in the pipeline include a 63 km sky bus project for Ahmedabad, 100 km sky bus project in Bangalore, 118 km sky bus project for Chennai and 86 km project for Mumbai, apart from a 87 km project for Pune.

"KRCL is also expected to implement projects for cumulative 259 kms in various countries. This include a 69 km sky bus project for Dubai, 75 km project connecting Medina and Mecca and a 34 km sky bus project for Singapore and Damascus," said the source.