Govt pulls up SAIL for slow progress on expansion

Govt pulls up SAIL for slow progress on expansion

New Delhi: Concerned over slow progress of Steel Authority of India Ltd. or SAIL’s capacity expansion plan to reach 26 million tonnes steel production by 2010, the government has decided to review the PSU’s projects on fortnightly basis to ensure their time-bound completion.

“I am not satisfied with the pace of SAIL’s brown-field expansions and have asked Steel Secretary to ensure that the PSU completes the envisaged projects in a time bound manner," Steel Minister Ram Vilas Paswan told PTI after reviewing the progress of SAIL’s over Rs54,000 crore expansion programmes.

As part of its corporate expansion plan, the country’s largest steel producer, SAIL, intends to augment its production capacity to 26.2 million tonnes by 2010.

While reviewing the projects, sources said, Paswan was upset about the inordinate delay being caused in procurement of equipments from global suppliers that has delayed the proposed expansions.

“He sounded upset and directed the ministry’s top brass to expedite the things, saying the country has to achieve 124 million tonnes of steel capacity by 2012 to which SAIL’s contribution would be crucial," a source said.

On its part SAIL is believed to have assured the ministry to speed up the process of procuring equipments, saying it is now better poised to negotiate with suppliers, as they do not have bulk orders with several companies holding back their expansions in the midst of global economic meltdown.

A senior official in steel ministry said the dilly-dally in finalising tenders for getting necessary heavy equipments from overseas, has delayed the expansion of SAIL’s Bokaro, Bhilai and Rourkela plants by almost a year.

However, the Navratna PSU is not to be blamed entirely for it, as the global suppliers were quoting three times higher rates for the equipments, the official said.