NEW DELHI: The Steel Ministry has asked states to come up with land and ore availability plans for setting up ultra mega projects, amidst PMO's thrust on trebling India's steel output to 300 million tonnes by 2025.
"Prime Minister Manmohan Singh has recently convened a meeting on ultra mega steel projects. We have been given guidelines for new plants. Accordingly, we have asked states to provide land and iron ore availability for such projects," Steel Minister Beni Prasad Verma told PTI.
Verma said the PMO (Prime Minister's Office) has emphasised that Steel Ministry should coordinate with mineral- rich states for such projects as iron ore is a key steel making raw material.
Verma's comment comes in the wake of a PM-headed panel National Manufacturing Competitiveness Council, entrusting country's top iron ore miner NMDCBSE 3.48 % with the task of creating the basic infrastructure for the first ultra mega steel plant with 12 million tonne (MT) annual capacity.
NMDC would procure land, get clearances like environment and forest approvals, ensure raw material linkage among other things.
The plan, which is aimed at removing hurdles that private sector steel makers face in creating additional capacity, is a step in the direction to achieve 300 MT capacity by 2025, a target recently set by the Prime Minister-led panel.
It is also expected to help India regain its image of an investment-friendly country against a backdrop of South Korean Posco and world's largest steel maker ArcelorMittal in July scrapping their big-ticket USD 18 million investment plans citing inordinate delays in getting clearances.
Besides, ArcelorMittal, Posco and Monnet Ispat pull outs, at least 85 MT capacity creation has been delayed for want of water, environment and forest clearances. Non-availability of the land is the primary hurdle though.
Finalising the growth strategy to treble India's steel capacity by the middle of the next decade, the PMO has said "pro-active facilitation of projects in the pipeline would be taken up on priority jointly by the Steel Ministry and the new investment facilitation mechanism in the Cabinet Secretariat."
The 300 MT target will be a significant jump from the 89 MT level which is projected to go up to 120 MT in 2013-14.
The PMO has said, "As the private sector finds it difficult to assemble land and get clearances, the state would assume a pro-active role in partnership with state governments."
Under the strategy, project specific special purpose vehicles (SPVs) would be floated for identified sites which would assemble land, get necessary approvals and clearances and tie up water and raw materials.
The SPVs would then be offered in a transparent manner for takeover by investors through a bidding process.