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State-owned NMDC has put the proposal to set up a steel plant in Karnataka on the back burner for at least next two years as the miner’s focus is on completing the ongoing project in Chhattisgarh, NMDC Chairman and Managing Director C S Verma said.
He said he is confident of completing the Nagarnar (Chhattisgarh) steel plant by the end of 2015 even as three auxiliary packages worth Rs 1,000 crore are left to be awarded.
“There is no progress on that (Karnataka steel plant proposal). That MoU (with Severstal) is over by the lapse of time. First, we have to complete our ongoing Nagarnar steel plant. Then only we will see any other investment in the other steel plants,” Verma said during his recent visit here.
NMDC had inked an MoU with Russia’s second largest steel maker Severstal in late 2010 for an initial 3 mtpa capacity plant in Karnataka with around Rs 16,000 crore investment.
But, differences cropped up between the two firms on shareholding patterns as both wanted more than 50 per cent in the proposed JV to gain management control.
A senior official of the Ministry of Steel had earlier said the government was not interested in giving majority stake to Severstal as the decision may impact other projects that have tie-ups with overseas companies.
NMDC and Severstal signed the implementation protocol for the project during a visit by an Indian government delegation to Moscow in November 2011.
“But the first priority is to complete our own steel plant,” Verma said.
On the progress of Nagarnar plant, he said, the Board of Directors in a meeting last week here decided to award one of the three packages and the remaining two will also be awarded soon.
“We will be able to complete it (Nagarnar plant) on time. There are three packages which are in the pipeline. They are all auxiliary packages. The packages will be less than Rs 1,000 crore. All the main packages are under implementation,” Varma said.
On the investment plans, he said that Rs 2,700 crore was the capex plan for the current fiscal and the Board is yet to decide on the same for the next year.
