The Orissa government will soon engage a consultant to frame a steel policy for the state. The cost of the consultant is proposed to be paid by the Orissa Mining Corporation (OMC).
The state steel and mines department has sought the approval of the government for this purpose. After the approval is obtained the consultant will be appointed, a senior official told Business Standard.
The consultant will guide the government to frame the policy, which will be the first of its kind in the state domain. Though the department had earlier written to the state-owned Industrial Promotion and Investment Corporation Limited (Ipicol) to appoint a consultant for the purpose, the latter didn’t agree to it citing financial constraints.
The latest move assumes importance in the light of fears raised in some quarters about the state government’s ability to provide raw material to all the MoU signing companies in a sustainable manner. It may be noted, the Confederation of Indian Industry (CII) had also suggested the state government for commissioning a study to assess the available mineral reserves and find out how many steel plants can be sustainable.
Sources said, the proposed steel policy will focus on providing the raw material linkage to the MoU singing companies.
The policy will seek to identify the best technologies to be adopted in the steel sector, the products to be produced, the size of the plants suitable for Orissa and suggest measures for survival of the small and medium steel plants in the face of stiff competition from the countries like China.
Since countries like China have fixed the minimum size of the steel plants at 5 million tonne per annum, the government feels a similar benchmark may be required for the units coming up in Orissa. The policy will also focus on measures to be taken by the government to enable the small and medium steel plants to face the world competition and the type of steel products to be manufactured in the state.
While there is growing demand for the long products in the developed countries for use in the construction activities, the demand for rolled products is more in the developing countries like India. Keeping that in view, the policy will try to specify the most beneficial product mix for the state in the backdrop of world market situation, sources added. The Orissa government has so far signed MoUs with 49 medium and large steel companies for setting up projects in the state envisaging an investment of about Rs 1,98,150 crore. Out of it, 29 steel plants have started partial production and provided direct and indirect employment to 48,000 persons.
