New Delhi: Government has convened a meeting of major steel producers next week to sort out issues impeding their mega investment plans in the country, even as it expects projects worth Rs2,80,000 crore by 2011-12.
“Steel Minister Ram Vilas Paswan has convened a meeting of leading steel producers and state Chief Secretaries next week to sort out issues pertaining to their mega investment and expansion plans in the country,” said a top Steel Ministry official.
The Steel Minister would also assess the progress made by these producers in implementing their mega projects both greenfield and brownfield ones, he said.
He pointed out that Chief Secretaries of mineral-rich states of Jharkhand, Orissa, Chhattisgarh, Karnataka and West Bengal too have been invited to participate in this meeting and share their views on translating these promised investments on the ground, he said.
Among those companies invited to participate were Rashtriya Ispat Nigam Ltd, Steel Authority of India Ltd, JSW, Essar, Tata Steel, Ispat, Posco, ArcelorMittal, Bhushan Steel and Power Ltd among others.
“The Steel Ministry is concerned that the demand for the commodity was growing at a phenomenal rate and would begin growing by 14% soon while the supply side was growing at less than 6%. So, there is an express need to bridge the demand-supply gap,” the official pointed out.
The Ministry is envisaging investment in the sector to the tune of a whopping Rs 2,80,000 crore by 2011-12, he said and pointed out that the government expected steel production to reach more than 100 million tonnes by 2011-12.
This meeting assumes importance amid reports that mega investment proposals like that of Posco and ArcelorMittal worth more than Rs1,30,000 crore were not really taking off owing to problems relating to land acquisition and iron ore mining rights among others.
The country’s current steel production was around 50 million tonnes and the additional production of 70 MT will take up the total capacity to 120 MT.
“Even if they operate at about 90% of their capacity, the production should be at least 110 million tonnes”, he reasoned.
The steel makers have solicited the Ministry’s help in thrashing out infrastructural bottlenecks that were impeding growth in the sector especially on issues like railways, road and port connectivity to streamline distribution of their produce.
During the meeting, the steel producers are expected to raise the issue of ensuring long-term raw material security to fructify their expansion plans. They also sought reducing ore exports to ensure raw material security.
“Some of them even suggested that there should be a regulator in the mineral sector, especially on iron ore. Their fear is that if ore gets exhausted, then their expansion plans may not fructify. We will also be talking to the concerned states in this connection,” the official said.
Paswan has already said his Ministry would take up with the Finance Ministry the issue of reducing the excise duty on steel to eight per cent from 16% and also discuss the increase in freight rate with the Railway Ministry.
The Finance Ministry had also been requested to abolish the duty on scrap steel and coke, he said.