Visakhapatnam Steel Plant (VSP) is brimming with activity as various works for expanding its capacity are being carried out on a war-footing.

Commissioning and stabilisation of various units is in progress as the production capacity is set to go up to 6.3 million tonnes next year. Various units as part of expansion project will be completed during March-September, 2010.

As part of stage-I expansion, blast furnace, steel melt shop and furnishing mill works have been taken up. Special bar mill, structural mill and other works form part of stage-II.

Agreement is done with National Mineral Development Corporation to meet iron ore requirement. After expansion, VSP will need 10 million tonnes iron ore per annum.

Major packages

The air separation tank work is being undertaken under Build, Operate, Own and Transfer. Major packages for sinter plant, blast furnace, steel melt shop consisting of LD converters, ladle furnace and reheating and degassing unit, continuous casting machines were awarded and work is moving ahead as per schedule. Calcining and refractory material plant, wire rod mill, raw material handling system, turbo blower–4, special bar mill, structural mill and turbo generator-5 and boiler-6 for power plant-1 are in advance stage.

Sinter plant-3 has been placed on M/S Tyazhprom export, Russia and M/S Mcnally Bharat Engineering consortium. The order for continuous casting machines of the steel melt shop is placed on Danieli of Italy, Danieli- India, MICCO India and Gillanders Arbhhtunot, India Consortium.

The second wire rod mill is placed on Morgan Construction Company, US and MECON, India Consortium. The special bar mill of the second stage of expansion is placed Siemens-VAI of Italy, Siemens, India and Shriram EPC, India Consortium.

Cost escalation

Due to variety of reasons, the project cost of expansion has escalated from Rs.8,600 crores by Rs. 3,000 crores. P.K. Bishnoi, Chairman and Managing Director of Rashtriya Ispat Nigam Limited, the flagship company of VSP, told The Hindu that there was no need for revised estimates.

The increase is within the norms of Public Investment Board. The project report was prepared on the basis of prices prevailing in mid-2005. Foreign exchange variation, increase in the cost of inputs and raw material during the implementation period 2006-10 are attributed as reasons for cost escalation.

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