Calcutta, Oct. 26: Sajjan Jindal today set April 2011 as the zero date to kick off work at the much delayed Salboni steel and power project in Bengal.
The board of JSW Steel, owned by Jindal and his family, cleared the Rs 21,500-crore plan for the first phase, which will involve a 4.5-million-tonne steel plant and a 660-mega-watt power unit.
The plants will be commissioned in three years from the zero date — the time signalling effective start of the project — or the middle of 2014 against 2011 as envisaged when Jindal signed a development agreement in January 2007.
Though the news should make chief minister Buddhadeb Bhattacharjee and industry minister Nirupam Sen happy, none of them would be able to ceremoniously flag off the actual start of work.
Bengal is likely to go to the polls in April-May, and the model code of conduct will prohibit them to be part of any such event.
They will not be at the helm of the state administration when the twin projects get commissioned, if the ruling Left Front falls to Mamata Banerjees Trinamul Congress after 34 years in power.
Had the original timeline been maintained, Bhattacharjee and Sen would have had something to showcase as the fruits of their fierce industrialisation drive, which is being blamed for the Left Fronts eroding power base.
However, the global economic slowdown and Maoist trouble in and around Salboni coupled with Jindals efforts to capitalise on his existing facility at Vijaynagar, Karnataka, where 6 million tonnes of fresh capacity are being added, had deferred the project several times.
Todays board resolution seems to have imparted a semblance of certainty to the first phase of the project, which will be bigger than that envisaged earlier.
On October 11, The Telegraph reported that work would kick off in April, and the board would officially disclose details during this board meet.
The Salboni steel plant will have a capacity of 4.5 million tonnes instead of 3 million tonnes as announced at the groundbreaking ceremony at Salboni on November 2, 2008.
A Maoist bombing that day set the stage for tumult in Bengal. The bomb targeting the chief minister exploded in front of Jindals convoy, triggering the events that led to the Lalgarh insurgency and deployment of central forces.
The power plant capacity has also been increased to 660 mega watt compared with 300 mega watt as Jindal declared on July 27, 2010 when he announced a landmark deal with Japans JFE Steel.
JFE may chip in with equity in the special purpose vehicle JSW Bengal Steel, in which JSW Steel, a listed entity, holds a 94 per cent stake.
The Rs 15,350-crore steel project will be funded through a debt-equity mix in the ratio of 2:1.
JSW Bengal will bring in equity of Rs 5,327 crore either alone or with JFE. It may also opt for an initial public offer. The Bengal government will chip in with Rs 6 crore as token equity via West Bengal Industrial Development Corporation.
The Rs 3,300-crore power plant will be funded through a 3:1 debt-equity mix. Jindal group firm JSW Energy will have a 76 per cent stake, while JSW Bengal will hold the rest.
Around Rs 2,850 crore will be shovelled in to develop two coal blocks — Kulti Sitarampur (coking coal) and Ichhapur (thermal coal). The company has set January 2011 as the zero date for these projects.
If and when the Jindal plant starts production, it will be one of the biggest new steel projects to get off the ground, thanks to the nearly 4,000-acre unencumbered land the Bengal government has provided it. The Tatas, Mittals and Posco are still struggling to get land for their steel plants in Orissa and Jharkhand.