Steel units to fund coal, rail JVs

The steel ministry was working in multiple ways to step up the availability of raw materials at viable prices to steel producers.

Speaking at the Bengal National Chamber of Commerce and Industry (BNCCI) here today, steel secretary Binoo Sen said the coal and mining ministries had been asked to raise production. This would take a year's time.

Coal India Ltd (CIL) would increase production through new projects. If CIL faced shortage of funds, the public or private steel majors would be asked to form joint ventures to part-finance the investment.

Similar joint ventures could also be worked out with Indian Railways to increase rake availability for the steel sector.

Steel demand from the small scale sector would be met by the private sector producers, which have assured the government that SSI demands forwarded by the Joint Plant Committee would be supplied. Sen pointed out there was a separate scheme for SSIs offering subsidy of about Rs 1,500-2,000 per tonne.

The steel ministry was also working on a plan to bring down interest rates for companies which had undergone financial restructuring with the finance ministry.

Steel producers have been raising prices. One of the reasons behind the price rise was the sharp increase in the cost of raw materials caused by the acute shortage of raw materials. Healthy growth in demand for steel had also led to strengthening of the price of steel.