Delhi-based Bhushan Steel is yet to get land for its six million tonne steel and power project near Asansol, but has almost completed purchasing land for its cold rolling (CR) project at Sankrail in Howrah.
Of a total requirement of 100 acres, the company has purchased 80 acres directly from the land owners.
Neeraj Singal, managing director, Bhushan Steel said, the balance would be completed soon and work would start by the middle of next year. The investment in the half million tonne of CR mill would be Rs 800-1,000 crore.
The CR project would be undertaken by Bhushan Steel. For the six million tonne steel plant, Bhushan Steel was in talks with Sumitomo Metal Industries for divesting a 26-40 per cent stake. “A special purpose vehicle would be set up for the project,” said Singal. Merchant bankers had been appointed by both sides and the deal would be finalized over the next six months.
Bhushan had approached the state government for acquiring land for the CR project initially, but the government offered land far from Kolkata. “We wanted it to closer to Kolkata,” said Singal.
The agreement for the CR project was signed with the integrated steel project in the first half of 2007. The investment in the CRM was small compared to the bigger steel project where the investment would be to the tune of Rs 20,000 crore.
The land requirement in the integrated steel project was much more at around 2,500 acres and the government was acquiring the land for the project by invoking the Land Acquisition Act 1894. Notifications had already been issued.
State government sources said, if Sumitomo partnered Bhushan in the steel project then a fresh agreement would have to be signed with the partners. The project faced a stumbling block recently with Coal India raising objections to having industrial projects in the Asansol-Durgapur belt area in the Bardhaman district.
However, Singal said, the company would realign its project and the government had shown the company officials the area which would be given. A Sumitomo team also recently visited the site.
Bhushan Steel had initially signed an agreement with the West Bengal government for a two million tonne steel project, which had now been scaled to six million tonnes, keeping the land requirement same. The capacity in the first phase would be three million tonnes.
