VSP expansion within three years

Visakhapatnam Steel Plant (VSP) is targeting to complete the proposed expansion programme within three years. The Cabinet committee on economic affairs has given its approval for VSP's Rs 8,692-crore expansion plan on Thursday.

"We have already started the land levelling works, laying of roads, electrical lines and construction of drainages. The main construction work will start in three-four months," Y Siva Sagar Rao, CMD of VSP, said.

VSP will appoint a consultant, who will assist VSP in designing tender documents as per the engineering specifications. Once this is complete, VSP will invite bids for the execution of works most of which would be allotted on a turnkey basis.

As per the expansion programme, VSP would add one blast furnace, one sinter plant, a steel melting shop, four rolling mills, new raw material storage yards besides other facilities.

"The construction of the fourth coke over battery is under way and so there is no immediate need to set up the fifth coke over battery," said K K Rao, director (operations) of VSP.

Once the steel plant completes its expansion programme, its liquid steel production capacity would increase to 6.5 million tonnes from the existing 3.4 million tonnes while its iron ore requirement would increase to about 11 million tonnes from the existing 5.5 million tonnes.

At the same time, the plant's major raw material (coking coal) requirement would also go up to about 7 million tonnes from the existing 3.4 million tonnes and its power requirement would increase by 180 mw.

"We are currently generating 265 mw power on our own to meet the present requirements. After the expansion, the requirement would increase by 180 mw, which we plan to generate on our own," KK Rao said.

Siva Sagar Rao said that the steel plant would take loans of around Rs 4,350 crore from financial institutions to take up the expansion programme while the remaining would be generated from internal accruals.

"About 48 banks, including 8-9 foreign banks, have come forward to finance the project. We will be short-listing the banks soon," he said.