Govt to review greenfield steel projects

Faced with increasing complaints from both the international and domestic steel industry over the slow progress of projects in the ore-rich states of Jharkhand and Orissa, the steel ministry will review all upcoming greenfield projects and the various memoranda of understanding signed by the states with different steel firms.

Steel Secretary RS Pandey will visit Ranchi and Bhubaneshwar to meet with state government officials this week and check on the progress of the MoUs and projects, besides taking up all outstanding issues with the states.

Also on the agenda will be the status of the dispute over the Chiria mines in Jharkhand between the state government and state-owned Steel Authority of India Ltd (SAIL).

SAIL had recently proposed a 12 million tonne steel plant in the state as a compromise formula to ensure that the entire deposits of the prized Chiria mines would remain with it.

Mittal Steel and Tata Steel have also been eyeing the 2 billion tonne reserves of Chiria, widely accepted to be the largest iron ore mine in Asia with high quality ore. The leases for the mine were originally with the Indian Iron and Steel Company (IISCO), which was merged with SAIL in February this year.

Official sources said that the secretary will review the infrastructure preparedness of these states and their ability to house the multiple steel projects that have been proposed and some of which are in the process of being set up. He will also take up the issue of renewal of mining leases with the states, sources said.

Both Jharkhand and Orissa have each signed over 40 pacts with Indian and foreign steel companies for the setting up of steel plants in the two states worth several lakh crores of rupees. These include all leading Indian names in steel as also South Korea's Posco and Arcelor Mittal.

While Posco signed the MoU with the Orissa government in June last year, it has not even acquired all the land needed for its proposed plant near Paradeep.

It has not been granted licences for leased mines despite having applying for it last September. Its 12 million tonne port-based plant entails an investment of $12 billion and is the single largest proposed foreign direct investment in India.

Mittal Steel also signed an agreement with the Jharkhand government last October to set up an identical 12 million tonne plant with an investment of over $9 billion.

Faced with little progress over the project, steel czar L N Mittal announced that he was pursuing a project with the Orissa government as well.

Domestic steel makers have also voiced apprehensions over the pace of progress of various greenfield projects in these states.

Most steel manufacturers have signed agreements with the governments of Orissa, Jharkhand and Chhattisgarh to set up various steel plants.