The Karnataka government is unlikely to clear any proposal from Korean steel major Posco for a steel plant in the State, even if the company decides to locate the plant in the State, Minister for Large and Medium Industries told The Hindu on Tuesday.
Speaking to journalists of The Hindu Group of publications about preparations for the Global Investors' Meet, which commences on Thursday, Mr. Nirani said, “Posco may not be cleared because the government would like to conserve raw materials such as iron ore for future generations.”
Mr. Nirani explained that the Government has adopted a first-come first-served approach, especially when dealing with scarce resources. Other proposals have already been received, including a proposal by Bhushan Steel, to establish a steel plant with a capacity of 6 million tonnes a year. Referring to Posco, he said: “They wanted the government to make the allotments for land, water, ore supply and other raw materials before deciding on whether to invest in Karnataka.” The State government had earlier cleared Posco's proposal to locate a 6-million tonne a year plant in the State, involving an investment of Rs. 32,300 crore.
Mr. Nirani said ArcellorMittal, unlike Posco, had paid the government an advance of Rs. 268 crore towards acquisition of 4,000 acres of land, of which 3,000 acres would be for the “main factory.” About 1,000 acres of land each would be utilised for ancillary units and for building a township for employees, Mr. Nirani said.
Conversion factor
Asked how much of the proposed investment of Rs. 5 lakh crore will materialise at the Global Investors' Meet, Mr. Nirani said: “Normally, the conversion factor [proposed quantum of investments that actually materialise] is 40 per cent in the country. Even if we assume a conversion factor of 55 to 60 per cent, the total investment will be about Rs. 2.75 to 3 lakh crore.” He pointed out that about 60 per cent of the investments will be in the backward districts of north Karnataka, particularly in Bellary, Bagalkot, Raichur and Gulbarga. “Investments amounting to more than Rs. 250 crore in the backward districts will attract more concessions,” Mr. Nirani said.
Power shortage
Referring to the power shortage in the State, Mr. Nirani said additional generation capacity amounting to 12,000 MW is likely to materialise as captive capacity for the units' needs.
