Also gave nod to World Bank-aided Rs 5,718 crore for the school education project
The Cabinet Committee on Economic Affairs (CCEA) on Wednesday gave ‘in-principle’ approval to the demerger of Nagarnar Steel Plant (NSP) from National Minerals Development Corporation (NMDC), in order to pave the way for strategic disinvestment of NSP’s Rs 23,140 crore new plant in Chhattisgarh by mid-2021.
Separately, the Union Cabinet approved the World Bank-assisted Rs 5,718 crore school education project under the new education policy (NEP) for six states.
The Cabinet also allowed Abu Dhabi National Oil Company (Adnoc) to export the crude oil stored by the company in the 1.5 million tonne (mt) tanks located in Mangaluru. Adnoc has 50% of the Mangaluru storage capacity on lease since 2018 but was not allowed to re-export the stored crude as per the terms of the contract. The move to relax the terms of storage sharing comes at a time when the government is trying to attract foreign companies to develop 6.5 mt of crude storage capacities across the country.
With the demerger approval, the CCEA has amended its earlier decision taken on October 27, 2016, to disinvest NSP as a unit of NMDC. NSP is a three million ton per annum integrated steel plant being set up by NMDC at Nagarnar, Bastar District of Chhattisgarh in an area of 1,980 acres. As on date, NMDC has invested `17,186 crore on the project out of which Rs 16,662 crore is from NMDC’s own funds and Rs 524 crore has been raised from the bond market. The construction of the plant is likely to be completed by April 2021.
“With demerger, NMDC can focus on its core activities of mining. Investors will have better visibility of the operations and cash flow of NMDC and NSP separately,” the government said listing out advantages of demerger before the sale. The Centre owns 69.65% in NMDC. “The CCEA has taken note that the process of demerger and disinvestment will be initiated in parallel and disinvestment of demerged company (NSP) is expected to be completed by September 2021,” it said.
The Strengthening Teaching-Learning and Results for States (STARS) project under the NEP seeks to support six states in strengthening the school education system. The centrally sponsored scheme will be implemented by the Department of School Education and Literacy. It will cover Himachal Pradesh, Rajasthan, Maharashtra, Madhya Pradesh, Kerala and Odisha, he said. The project cost is estimated to be Rs 5,718 crore which includes World Bank funding of $500 million (about Rs 3,700 crore).
The Union Cabinet also approved a special package worth Rs 520 crore in the union territories of J&K and Ladakh for a period of five years till FY24 and ensure funding of Deendayal Antyodaya Yojana – National Rural Livelihoods Mission (DAY-NRLM) on a demand-driven basis without linking allocation with poverty ratio during this extended period.