JSW Steel and the West Bengal government have completed the land transfer formalities, paving the way for the Sajjan Jindal-founded company’s total possession of the entire 4,334 acres earmarked for its 10-million-tonne steel plant in Salboni. The clearance marks a major milestone for the two parties, as nibbling issues have for long left pending the formal hand-over of the land and, thus, the construction of the facility in Paschim Medinipur district of the state’s southwest.
Seshagiri Rao, joint managing director and group CFO of JSW Steel, said the entire land has now come under the control of the Mumbai-headquartered entity. “We are looking to start the construction of the plant in the current financial year,” he told Business Standard.
All the issues, Rao said, have been ironed out. The paperwork to officially transfer the entire land parcel in favour of JSW Steel Bengal has been completed. The WBIDC has leased out 189 acres to the company. The rest of the land (barring a few acres that was acquired directly from their owners) has come from the land reforms department of the state government.
Land clearances have for long stood as a major stumbling block in the start of construction of the plant. As per the current status of the project, the company has got possession of the entire documents for the land dealings. The construction will begin in October.
Engineers from JSW Steel’s Vijayanagar plant in Karnataka are already at the plant site in Salboni, and are working on the ground. The first phase will come on-stream in three years from the date of construction. The capital expenditure for the first phase is $3 billion (Rs 15,000 crore at $1=Rs 50). The 1982-incorporated company will raise $2 billion, or Rs 10,000 crore, in debt funding for the first phase from the export credit agencies.
However, given the iron ore situation in Karnataka, JSW is leaving no stone unturned in making sure that the West Bengal plant does not run into such hurdles. Rao said the company was monitoring the Vijayanagar situation. “We are taking precaution to avert such a situation in Bengal,” he said, but did not divulge the company’s plans to secure iron ore supplies.
“In Vijayanagar, we also import coal. In Bengal we don't need to import coal as we have got coal mine concessions. That is the fundamental difference between the two,” Rao said. “Also, coal constitutes to higher costs in relation to iron ore. So, Bengal has some unique advantages. We are very much committed to it.”
Currently, JSW Steel is in negotiations with equipment suppliers, he added.