Public-sector behemoth Steel Authority of India Ltd (SAIL) has firmed up plans to build a state-of-the-art steel plant at Burnpur for ₹36,000 crore, which promises to be the single-largest investment in an industrial project in Bengal in recent times.
The central PSU has received the initial board approval for the project, which will come up near the existing IISCO Steel plant and have a capacity of 4.08 million tonnes (mt). SAIL is in the process of selecting a vendor to execute the project. The company is expected to finalise the party by end-October and then go for the second phase of board approval.
If all goes to plan, the new plant is likely to go on stream by 2029. Given the proposed configuration, the PSU is looking at the project as a new unit rather than an expansion of the existing 2.5mt plant. The new facility will come up in the area where there used to be an old plant.
While the existing plant focuses on long products (wires, rods, bars) used in construction, the new one will produce flat products (hot and cold rolled coils), which are used in automobiles and consumer durables.
The new IISCO plant — expected to create a flurry of economic activity and give a boost to the economy of adjacent regions in West and East Bardhaman, Purulia and Bankura — is part of SAIL’s ambitious target to scale up capacity to 35mt from 20mt by 2031, entailing a combined investment of ₹110,000 crore.
As part of this phase of expansion, SAIL will look at fresh capacity addition across all the company’s existing sites in Durgapur, Bokaro, Rourkela and Bhilai.
The management has prepared the pre-feasibility reports for Durgapur and Bokaro, with plans to go for stage-1 approval from the board soon.
Chequered history
Established in 1918, The Indian Iron & Steel Company Ltd (IISCO) marked the beginning of the iron and steel industry in the country. The first blast furnace of the company went into production in 1922.
After a stellar run for four decades, the company fell into hard times by the mid-1960s before it was nationalised in 1972. It became a wholly owned subsidiary of SAIL by 1979 and finally merged with the PSU in 2006.
That year, then Prime Minister Manmohan Singh, with then Bengal chief minister Buddhadeb Bhattacharjee by his side, flagged off the expansion and modernisation of IISCO, which in effect was the construction of a new plant.
Though it was to be completed by 2009-10 at an estimated cost of ₹9,600 crore, the project was finally commissioned in 2015 with a cost escalation of 72 per cent to ₹16,480 crore. Prime Minister Narendra Modi was at Burnpur to do the honours along with chief minister Mamata Banerjee.
Industry observers say that coordination between the state and the Centre would be needed to pull off a project as large as that SAIL proposes to undertake now.
Though SAIL has the requisite land parcels, it could need administrative support to remove squatters. Given that a steel plant’s economic multiplier effect matches few others, the observers hoped that both sides would be able to rise above political differences.
“As a rule of the thumb, 6mt of materials need to be moved to produce 1mt of steel, which creates opportunity on the logistics side. Moreover, to support a steel plant, hundreds of small and medium units come up in the vicinity, creating indirect employment. The proposed IISCO plant can, therefore, have a transformative impact on the Asansol-Durgapur region,” they argued.
