K'taka exporter to set up steel plant in Kadapa

The Andhra Pradesh government is likely to sign a memorandum of understanding on May 21 with the promoters of a huge steel project, led by Karnataka legislator and an iron ore exporter Janardan Reddy, who along with Karnataka tourism minister Sriramulu and other co-investors is planning to set up a 4-million tonne capacity steel plant near Ambavarm village in Kadapa district.

The primary reason for these big time iron ore exporters from the Bellary region getting into steel making on a massive scale is the Centre's move to curb exports.

The promoters propose to set up a plant with an initial capacity of 2 million tonne with a long-term plan to scale it up to 10 million tonne capacity, according to state government officials.

The government has already identified 8,000 acres of readily available government land near Ambavaram village and is finalising other details, which will be part of the MoU.

Janardan Reddy's firm currently supplies iron ore to JSW steel project in Karnataka besides exporting the raw material to China, according to officials.

It has over 100 million tonne reserves in mines in the Bellary region and a few mines in the Anantapur area.

While it took 20 long years for the public-sector Vizag Seel project to start operations in the eighties, which is now going for expansion with over Rs 8,000 crore investment to reach 6.3 million tonne capacity, the promoters of the new project promised the government to go beyond that capacity in half of the time the former took, officials said.

The promoters zeroed in on Kadapa district after considering locations in other Rayalaseema districts, mostly in Anantapur, which is bordering Karnataka and also a spillover region of iron ore reserves, in a bid to find water for their plant.

Water is said to be the main reason that forced them to think beyond the Bellary region and Karnataka. Besides, the long-term relationship with chief minister Y S Rajasekhara Reddy hastened their decision in favour of Kadapa district.

The proximity to Krishnapatnam-Obulavari palem railway line, which is being actively used by iron ore exporters is another reason for choosing Kadapa district, the officials said.

With over Rs 4,000 crore initial investment besides an overall plan to pump in Rs 40,000 crore, equal to Posco's Orissa project, this would change the economy and lives of people in the district.

While the government proposes to divert 2 tmc of water required for the initial 2 million capacity plant from the nearby Gandikota reservoir, the officials have also been working on other alternatives for future requirements.

Meanwhile, Opposition parties alleged that the chief minister's son was one of the partners in the project, which was denied by the promoters.