This will, in effect, raise the project cost again to Rs 5,515 crore from the Rs 3,300 crore originally planned five years back. The institutions are yet to take a decision on new proposal.

JVSL is targeting total production of 1.1 million tonnes of hot-rolled coils (HRC) for the first full year of production. It will have an installed capacity of 1.57 million tonnes.

The company had to stop production in October last when a technical slag occurred at its 0.8-million-tonne corex-I module.

The proposed 3-million-tonne pelletisation plant, after much delay, is expected to come up around May, while the second 0.8-million-tonne corex module is expected to go onstream around the same time.

In the interim pellets, which were earlier being imported, will be sourced from Mandovi Pellets and Kudremukh Iron Ore Co.

As a result of thefunds crunch the company is facing, restarting operations was entirely dependent on the institutions approving additional funding of the cost overrun. Loans of Rs 70 crore from the company has allowed a restart of operations.

The revised project cost now stands at Rs 5,515 crore, while the total debt has ballooned to Rs 3,650 crore. Of these, foreign currency loans comprise Rs 1,200 crore raised at an average cost of 9 per cent.

This does not include any hedging cost, as the company has a high export commitment under the EPCG scheme.

The domestic debt of around Rs 2,400 crore carries an average cost of 17 per cent.