The SAIL-led consortium, which bagged rights to develop three iron ore mines in Afghanistan, plans to spend over $1.3 billion only on creating infrastructure out of the total $11 billion project cost.
"The members while putting their final bid had projected to spend $1.35 billion on infrastructure development. But, the maximum outgo would be on setting up of the steel plant," an informed source, on condition of anonymity, said.
SAIL Chairman CS Verma yesterday said there was a need to build 200 km each of rail, road and transmission lines to connect the mines to the proposed steel plant, which will come up only after Afghanistan provides with coking coal and limestones to feed the facility.
The source said an $7.8 billion has been earmarked for the setting up of the steel plant of six million tonne a year capacity in two equal phases. The 1,000 MW coal-fired power plant would cost $1 billion.
Apart from this, the consortium has earmarked $470 million investment on mining development and $75 million for carrying out the detailed exploration of the mines, which have an estimated reserves of 1.28 billion tonne.
The immediate plan of the consortium is to carry out a geological study of the mines over a three-year period.
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There are seven members in the consortium which includes three state-run firms SAIL, NMDC and RINL. JSW Steel, JSW Ispat, Jindal steel & Power and Monnet Ispat & Energy are in the consortium from the private sector.
The consortium would sought for sovereign guarantees for providing financial assistance by way of interest-free loan, grant-in-aid and other means for the project, Verma had said, adding it would also approach the Afghan government and reach out to multilateral agencies to part-finance the project.