The Telegraph
Since 1st March, 1999
Email This Page
Surprise choice for SAIL units

New Delhi, Nov. 2: The Steel Authority of India Ltd (SAIL) is planning to set up processing units at Nahan in Himachal Pradesh, Mahanar and Bettiah in Bihar and in Jammu and Kashmir.

The SAIL move is a little baffling because steel makers do not usually think of setting up facilities in these areas.

According to steel ministry officials, Ram Vilas Paswan, their boss, is not averse to the Rs 1,200-crore plan to set up pipe mills and TMT bar factories in these places.

Paswan is from Bihar and Mahanar is near Hajipur, the constituency he represents in the Lok Sabha.

Besides, his Lok Janshakti Party’s sole MLA in Himachal Pradesh is from Nahan.

Downstream factories make good business sense and steel mills have long been encouraged to get into these segments by management consultants.

Usually such processing factories are set up where there is a large market for the products.

The Nahan factory, to be set up on 30 acres, will make TMT bars that are used in construction. This factory should have ideally come up in Maharashtra or Karnataka — states witnessing a construction boom and where SAIL does not have any factory.

A plant in strife-torn Jammu and Kashmir makes little business sense.

However, officials say there is a general directive to set up units in that state and in the Northeast to create jobs and thereby wean the youth from militancy.

Steel ministers have a tendency to set up processing plants in regions that are of interest to them. During the tenure of the United Front government, between 1996 and 1998, the then minister Birendra Baishya wanted a similar downstream project for his home state Assam despite protests from economists over the unviability of the plant. The plan was given up when the government fell.

Mohan Kumarmangalam, when he was the steel minister, got SAIL to build a stainless steel plant in his home constituency, Salem.

For years the Salem plant remained a loss-making entity, producing stainless steel from raw material shipped from Alloy Steels Plant, Durgapur, which is over 1,200 kilometres away.

Email This Page