Total investment in the 50:50 joint venture would be Rs 201 crore and commercial production would begin from 2014, Steel Authority of India (Sail) chairman and managing director C S Verma said.
Expressing happiness at Sail's gesture, the chief minister said that job opportunities would be created for about 75,000 people in Nandigram.
Nandigram in East Midnapur district, where 14 people were killed in police firing in 2007 resisting land acquisition for a chemical hub, was one of the important milestones which led Mamata Banerjee's Trinamool Congress to assume power in the state after over three decades of Left Front rule.
The project would come up at Jellingham on 50 acre within the existing 128 acre of BIFR company Burn Standard, a subsidiary of Railways.
Burn Standard managing director D Marandi said Indian Railways was extending support for execution of the project.
"The equity contribution from our end will be Rs 25 crore after adjusting the price of land. Railways will offer Rs 25 crore in a mix of equity and loans to us," he said.
The Railways has also offered assured buyback of 50 per cent for 10 years of production of 10,000 bogeys and couplers.
Marandi said once the JV was commercialised the company would propose to convert the land into an industrial park.
Railway minister Mukul Roy and state finance minister Amit Mitra were also present during the signing of the MoU.
