Sucheta Dalal :Will greenfield steel projects ever see the light of day?
Sucheta Dalal

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Will greenfield steel projects ever see the light of day?  

March 24, 2010

India plans an annual steel production capacity of 124 million tonnes (MT) by 2011-2012. However, other than the already planned steel plant projects, most of the proposed steel plant projects in the country continue to remain in limbo. These are those greenfield projects, which simply refuse to gain momentum due to political, local, and rehabilitation issues.


ArcelorMittal’s steel project in Khumti district of Jharkhand has been marred by land acquisition issues for the past couple of years. Unable to sort out the local issues, the company now plans to shift the plant to another district in Jharkhand.


JSW Steel Ltd’s most talked about steel plant in West Bengal is facing delays, thanks to the Maoist issue. The company is developing a 10MT steel project at Salboni in West Bengal. It is facing political issues in continuing with the construction work of this project. The proposed steel project was expected to start construction work in 2008. However, company officials from JSW have been quoted in media reports stating that the work will begin in the next six months. Thus, the first phase of the plant is now likely to be completed in three years.


While JSW struggles amid political issues, POSCO’s steel plant in Orissa has stagnated. The steel company has been unable to acquire land for its Orissa project since 2005. POSCO Steel had proposed setting up a 3MT steel plant five years back, but there is absolutely no development on the same.


Similarly, Tata Steel Ltd’s project in Orissa too is at a standstill. The company is developing a Rs21,000-crore steel plant in Kalinganagar. The plant was facing opposition due to displacement and rehabilitation issues. Construction work on this project, which has been delayed by four years, is expected to commence soon.


Ironically, all these companies which are still to see any concrete development on their proposed greenfield projects, have also announced joint ventures with other steel majors or mining related companies.


According to a PTI report, POSCO India has teamed up with Steel Authority of India (SAIL) for its Jharkhand project. Given that SAIL has the required iron ore inputs, with this tie-up, POSCO’s steel project may now turn out to be feasible. The company had been struggling with its Orissa steel plant project from the past few years.


Tata Steel has signed a joint venture with state-run NMDC Ltd to explore possibilities of entering into joint ventures for the acquisition, exploration and development of mines, extraction and processing of minerals, setting up of integrated steel plants and any other business of mutual interest. — Amritha Pillay

-- Sucheta Dalal