Orissas had enough of steel plants, mulls capping MoUs

Bhubaneswar, Nov 21 | Updated: Nov 22 2005, 05:30am hrs
Even though international steel majors like the Corus Group Plc. and Magnitogrsk Metallurgical Kombinat Steel (MMK Steel) have shown interest in setting up big ticket steel projects in Orissa, the state government is yet to take a decision whether to sign any more MoUs in the steel sector or not. Orissa government has already signed 43 MoUs lining up 58.04 million tonnes of steel projects with a total projected investment of Rs.1,33,656 crore.

Sources in the government told FE, the state government will take a fresh view on signing of new MoUs in the steel sector as it is facing the problem of availability of land and linkage of iron ore mines, coal mines and water supply for the new projects.

The state government is going to put a cap on the signing of MoUs in steel sector, said a source. But, it added, it is also thinking of accommodating some more projects in place of the companies shying away from the MoUs.

About a dozen companies including the AML Steel & Power Ltd., Sun-Flag Special Steels Ltd., Agrim Steel Industries Ltd. have developed cold feet on their projects.

UKs second largest steel producer, London heaquartered Pound 9 billion steel and aluminum company Corus, is going to make a presentation to the Orissa government about its steel project this week. Corus, worlds 8th largest steel company, with a capacity of 19 million tonnes has about 50% of the UK carbon steels market and around 11% of the European carbon steels market.

A high-level team from the steel major is arriving here on November 25, sources in the government said.

Earlier this month, Russian company MMK Steel, led by Indian steel company Uttam Galva Steel, has given a proposal to set up a 10 million tonne integrated steel plant with maximum value addition upto auto component making.

The company chairman, Viktor Rashnikov, flew down from Russia to give the presentation on the project to the state chief minister, Mr.Naveen Patnaik.

The government, however, is treading cautiously on the MMK Steel proposal as Uttam Steel had earlier abandoned the MoU it signed 1995 for setting up a steel plant in the state. Besides the Corus and MMK Steel, some small companies have also evinced interest in setting up steel projects in the state.