Calcutta, Oct. 29: Tata Steel is close to starting work on its first greenfield project at Kalinganagar, Orissa. The company has given priority to this project over four others planned in India and abroad.

The company has signed MoUs with the Jharkhand and Chhattisgarh governments and is exploring opportunities in Iran and Bangladesh.

T. Mukherjee, deputy-managing director (steel) of Tata Steel, said the orders would be placed shortly. “We have worked on these contracts,” he said.

This development is significant as the Orissa government has stipulated that the steel company should spend 25 per cent of its project cost before it gets the crucial lease to mine iron ore.

The 6-million-tonne (mt) Kalinganagar project will be undertaken in two phases.

Mukherjee said the cost of setting up a capacity of a million tonnes would cost around Rs 4,500 crore. The first order could be of this value. The company wants to ramp up its production capacity in the country to 20 mt from 5.3-mt which is the capacity of its Jamshedpur plant.

However, he said it would be difficult to start all the projects simultaneously. “We have decided to give Kalinganagar top priority,” he added.

If the Corus deal goes through, the project will be strategically important for the company.

Tata Steel plans to manufacture primary steel products such as slabs and billets in India for export to the UK and Netherlands to give the finishing touches to the products.

The company is building a port at Dhamra, close to Kalinganagar, along with Larsen & Toubro.

The company expects to start exports from Kalinganagar to Corus’ UK and Netherlands finishing mills by 2009.

However the £4.3-billion offer from Tata Steel is far from over. The largest shareholder of Corus, Standard Life, has voiced its reservation against the 455-pence offer. Tata Steel is likely to move the UK court next week seeking a date to hold an EGM for shareholders to vote on the offer.