Uncertainty hangs over the proposed Kadapa Steel Plant (KSP) mainly due to the Central government’s wait-and-watch approach. It is prompted by the huge investment required, and vagaries of the steel market, particularly slack in demand for steel.
SAIL uninterested
Basically, the Centre is learnt to be not keen on setting up KSP as a public sector unit, and has delegated the responsibility of finding investors to the State government.
The possibility of State-owned Steel Authority of India Limited taking up the project is said to be bleak because of certain policy issues. The ball is thus in the State’s court now to look for companies who might be willing to invest in the project.
The basic impediments are MECON Limited ruling out its feasibility and the time taken for exploration of the Obulapuram mines for iron ore, that would be the feedstock for the plant.
Iron ore from NMDC
The silver lining in the otherwise bleak scenario is Steel Minister Dharmendra Pradhan’s assurance to Chief Minister Y.S. Jagan Mohan Reddy to get the National Mineral Development Corporation to supply iron ore to KSP and to provide the necessary clearances if the State manages to rope in private investors.
However, the Centre continues to be doubtful about the overall feasibility of the project and availability of fine quality iron ore in the region during the pendency of submission of final feasibility report, according to a source.
In addition to Obulapuram mines, only some parts of Anantapur district have iron ore deposits suitable for the 3 three million TPA project. Water is to be supplied from Somasila dam.
Task Force’s call
A lot of issues are to be sorted out by the Centre and the State.
The final vetting of the project is to be done by the task force constituted by the Ministry of Steel to give the project a tangible shape, envisaged in the Andhra Pradesh Reorganisation Act.
While this is so, the State government is reportedly reaching out to potential investors, including a few MNCs which had evinced interest in the project during the TDP regime.
Former Chief Minister N. Chandrababu Naidu had laid the foundation for the steel plant in December 2018.
