The Telegraph
Since 1st March, 1999
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SAIL asked to hasten expansion

New Delhi, July 8: The Steel Authority of India Ltd (SAIL) will expand its production capacity from 14.5 million tonnes per annum to 22.5 million tonnes at a cost of Rs 37,000 crore. Most of the cost would come from internal accruals.

At a review meeting chaired by steel minister Ram Vilas Paswan today, SAIL top brass said the expansion would be completed within five years, though the government has asked the company to complete its major programmes within 2009.

Paswan, in an oblique reference to L.N.Mittal and his plans to get a slice of the Chiria mines, told SAIL officials that the state-run firm would have to finetune its strategy as steel makers are now competing globally and SAIL would face competition even on domestic turf.

Paswan also asked SAIL to keep expansion costs down by benchmarking it against similar private sector plans, which would mean benchmarking costs against Tata Steel's brownfield projects. The minister also asked the company to come with complete packages for cabinet approval and not seek permission in driblets every year.

SAIL’s expansion plan envisages an investment of Rs 9000 crore for Bhilai steel plant, Rs 6,340 crore for Bokaro, Rs 4,590 crore for Rourkella and Rs 2,840 crore for Durgapur Steel Plant.

But the largest budget has been reserved for IISCO, Burnpur, which will see an infusion of Rs 9,600 crore. The Burnpur plant will get a makeover, which will include a 4000-cubic-metre blast furnace, new steel melting shop, continuous casting facility and rolling mills.

Salem will get about Rs 1,553 crore in SSP for modernisation, backward integration and expansion of rolling facilities. SAIL officials said: “The Rs 37,000-crore plan not only envisages a near doubling of SAIL’s production capacity, but also has other key components like sustainability of current steel production, quality enhancement, energy reduction and minimised environmental impact.”

The government has been trying to build SAIL into a world-class steel giant by slowly merging most of the state-run steel firms with it. IISCO, which owned the iron-rich Chiria mines, was merged with it to help give it a much needed raw material base.

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