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Steel makers concerned over project delays

By Soudhriti Bhabani, IANS

Jamshedpur (Jharkhand) : India’s leading steel producers are concerned over the delay in executing the country’s big steel projects due to red tape.

“I personally feel that both regulatory authorities and government need to gear up and be more responsive in terms of sanctioning licences and paperwork for big steel projects,” H.M. Nerurkar, chief operating officer of steel at Tata Steel, said here at the ongoing steel industry seminar Steelrise 2008.

He said Wednesday that Tata Steel’s greenfield projects are delayed by 12 to 16 months.

Steelrise 2008, a three-day international conference cum exhibition on steel, was held to discuss targeted development and employment generation in the industry and to meet growing domestic consumption of steel.

“We have already taken a big risk by ordering major equipment for the Kalinganagar project in Orissa. The order worth Rs.100 billion ($2.5 billion) has already been placed for the plant but if we don’t get the land now it would be major problem for us,” he said.

Tata Steel had signed a memorandum of understanding (MoU) to set up a 6 million tonne (MT) plant at Kalinganagar in Jajpur district of Orissa in 2005. Local protests over land acquisition have delayed the implementation of the project.

“These delays on the ground have time effect as well as cost effect for the company. The equipment, which we have already ordered, will start arriving this year. If we don’t get land, where will we keep that?” Nerurkar asked.

Speaking on the challenges steel industry faces in India, Amit Chatterjee, advisor to Tata Steel’s managing director B. Muthuraman, said: “It’s a big question now whether the target of producing 180 million tonne of steel in India by 2020 could be achieved.

“There are certain tendencies in our country which stall the growth of the industry.”

Indian policymakers and industry leaders have set a target to expand annual steel production to 180 million tonnes by 2020.

The target would entail a 10-12 percent annual growth in steel making capacity over the next few years with an investment of over $100 billion to build a steel hub spanning the four states of Chhattisgarh, Jharkhand, Orissa and West Bengal

These four states in eastern India have the lion’s share of the country’s iron ore reserves.