Rourkela Steel Plant (RSP) of Steel Authority of India Ltd (SAIL) is facing a 40 per cent cost escalation for its expansion to 4.5 million tonnes.
S S Mohanty, executive director (MM) and (P&A) RSP, said, the original investment planned was to the tune of Rs 6,800 crore. Projects worth Rs 11,800 crore had been approved for the expansion project. He was speaking on the sidelines of the annual general meeting of the Indian Refractory Makers Association (IRMA).
Given today’s prices and 2007-08, which is when the orders were placed, cost escalation is to the tune of 40 per cent.
The only item for which there would be re-tendering, was the plate mill. Mohanty said, orders were placed towards the end of 2007 and beginning of 2008, before the downturn. Hence RSP could not take advantage of the fall in equipment prices.
However, the plant would see some savings for the plate mill. The expansion project was on track. At present, the capacity of the plant was two million tonnes, which would increase to 4.5 million tonnes by 2011-end.
The expansion was part of SAIL’s Corporate Plan for 2012, which entailed capacity expansion to 20 million tonnes from 13 million tonnes. A plan for 2020 was also being considered, but Mohanty said, it was yet to crystallize. The 2020 plan was to increase capacity to around 53 million tonnes.
Crude steel production in India which was approximately 53.90 million tonnes in 2007-08 went up marginally to 55.2 million tonnes in 2008-09 in spite of the meltdown.
