SAIL ray of hope for state - Hint of plant in Kulti with foreign partner

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  • Published 26.05.12

Calcutta, May 25: Steel Authority of India Ltd (SAIL) is exploring the possibility of setting up a speciality steel plant with a foreign partner in Kulti, seeking to tap pre-existing advantages at a time the Mamata Banerjee government is under pressure to find a trophy investor.

If SAIL’s plans materialise, it will mean an investment of between Rs 6,000 crore and Rs 7,000 crore with a potential to generate 1,500-2,000 jobs.

“It is still at a preliminary stage. We are discussing the project with a foreign partner,” SAIL chairman C.S. Verma said at Writers’ Buildings after meeting chief minister Mamata Banerjee.

Although the state government has been saying it has received investment proposals adding up to Rs 80,000 crore, no big-ticket private project has got off the ground yet. If the public sector SAIL’s plans come through — such plants usually take three years to complete — it will offer an investment breather to the government.

A plant of 1.2 million tonnes — the likely annual capacity — should have generated more employment but speciality steel usually does not require as many hands as an integrated steel plant. The high-grade alloy and special steel finds application in defence and automobile sectors.

The foreign partner could be a Japanese company — a sign that earlier investments from that country in Bengal can act as a magnet for others if conditions are amenable.

In Burdwan’s Kulti, many circumstances have coalesced to work for SAIL’s benefit. The steel giant already holds 850 acres in Kulti, including a deserted colony of 2,300 residential units and a nine-hole golf course.

The proximity of three SAIL units — the new-look IISCO at Burnpur, the modernised and expanded Durgapur Steel Plant and Alloy Steel Plant (ASP) in Durgapur — is another attraction. SAIL is setting up a Rs 1,500-crore iron nugget manufacturing unit with Kobe Steel of Japan on ASP’s vacant land.

“We have been looking how to utilise Kulti for a long time. We can source the basic raw materials for the new unit from the existing plants,” Verma said.

The roller-coaster ride of Kulti is a pointer to the dramatic changes that have taken place in Bengal over the past few years.

Kulti Works, set up in 1870 as Bengal Iron Works Company, was closed down in 2003, as IISCO decided to not pump in fresh investments to revive the loss-making unit that made cast iron and spun pipes. Following the merger of IISCO with SAIL in 2006, the steel company had been on the lookout to lease the land but could not find acceptable offers.

Then the land war broke out in Bengal and vacant land became a goldmine. SAIL is already setting up a Rs 85-crore wagon manufacturing unit with the railways arm, Rites, at Kulti.

SAIL and Burn Standard Co, a PSU under the railway ministry, today signed a pact to set up a unit to manufacture freight bogies and couplers at Jelingham, East Midnapore.

Railway officials said the Rs 202-crore project would be set up on 50 acres of Burn Standard land. “Annually, the unit will produce 10,000 bogies and an equal number of couplers. The target date of commissioning is 2014,” said a railway official.

However, the chief minister requested officials to complete construction by 2013.