Prime Minister Manmohan Singh has set up a committee of infrastructure-related ministries to monitor upcoming steel projects and help investors avoid delays in acquiring land and raw materials.
The new inter-ministerial group will review infrastructure bottlenecks relating to ports, rail and road networks and coordinate issues regarding availability of iron ore and coal.
According to a steel ministry official who did not want to be named, all large projects between 3mt (million tonnes) and 6 mt capacity, will be given top priority by the group.
Steel city: The Tata Steel plant in Jamshedpur. The PM had said in March that he wants the Mittals and the Tatas to invest more at home
The effort will be coordinated by the steel ministry, which is currently preparing a report on the infrastructure requirements of the steel sector. Secretaries of all infrastructure-related ministries such as railways, shipping, road transport, as well as mines and environment, will be members.
Manufacturers such as South Korean steel giant Posco—which represents India’s largest foreign direct investment with a proposed $12 billion (Rs48,360 crore) plant—have been plagued by delays and local resistance to their entry. State and Union government officials generally have been keen to accomodate steel investment because they usually mean a large number of jobs.
At a steel summit in March, Singh said a long-term solution to agrarian distress is to shift the work force from agriculture to manufacturing. “I want the Mittals and the Tatas to also invest more at home,” he said.
Posco has got stuck over the inability to secure land and access to iron ore; there are some 250 previous application claims to the same Khandadhar mines it seeks to lease.
The mines ministry recently asked the Orissa government to hear all previous applicants—likely to be a time-consuming process.
About 175 steel investment proposals worth Rs3-3.5 trillion have been signed across the country, more than 40 each in the eastern states of Orissa, Chhattisgarh and Jharkhand.
The number of steel projects is expected to rise further as Karnataka also invites steel investors by opening up iron ore mines to competitive bidding.
Arcelor Mittal, the world’s biggest steel maker, which first announced a $12 billion investment in Jharkhand and later in Orissa, has now identified land in both the states—Keonjhar district in Orissa and two sites in Jharkhand’s Singbhum and Gumla districts. It has yet to acquire it.
Analysts say delays could result in India importing more steel if production does not keep pace. With industrial growth at 12%, demand is unlikely to slacken, they add.