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Having failed to achieve their capex targets last fiscal, three major state-owned firms - SAIL, NMDC and RINL - hope to meet cumulative Rs 15,820 crore target set for the current fiscal.
Expressing hope of achieving their targets at a meeting with Finance Minister P Chidambaram recently, Steel Authority of India has said its Rs 11,500 crore capex target for the current fiscal was on track.
Similarly, Rashtriya Ispat Nigam and country's largest iron ore producer NMDC have also expressed confidence in achieving their Rs 1,600 crore and Rs 2,720 crore capex targets for the 2013-14 fiscal, a source present in the meeting said.
These firms, which fall under the Steel Ministry, had failed to come even close to their capex targets last fiscal due to reasons ranging from delays on the part of contractors to unforeseen developments while executing projects.
SAIL had Rs 14,500 crore capex target for 2012-13 fiscal but it could achieve only Rs 9,755 crore. RINL's capex target fell short by over 30% to Rs 1,287 crore. NMDC's was the worst at Rs 1,607.24 crore compared to the Rs 4,655 crore target for capital expenditure for 2012-13 fiscal.
"A warning from the Finance Ministry that it may ask PSUs to declare a special dividend in case of shortfall in targeted capex has triggered a change in the way PSUs used to look at the targets. They are now in a hurry to achieve targets," the source said.
SAIL is investing on enhancing capacity at all its five major plants. The investment is part of the Rs 72,000 crore that the company is putting in to raise capacity to 24 million tonne per year from 14 mtpa now.
RINL's capex plans involve capacity expansion at its plant at Vizag from 2.9 mtpa to 6.3 mtpa. NMDC's capex is aimed at raising production capacity at its exiting mines.
These three firms have set for themselves an ambitious Rs 14,925 crore capex target for the 2014-15 fiscal. SAIL plans to dole out Rs 10,500 crore on capital expenditure, NMDC Rs 2,890 crore and RINL the remaining at Rs 1,535 crore.
