Ernst and Young suggest UMPP model for steel plants in India

Monday, 24 Jan 2011
Ernst and Young said that India should look at setting up ’mega steel plants’ on the lines of 4,000 MW ultra mega power projects being built in the country to accelerate growth in the decade.
Mr Anjani Agrawal partner and metals & Mining leader with E&Y said that “The model for ultra mega power projects can be adapted to set up mega steel projects. We should get all stake holders together, conduct techno commercial studies to identify specific locations for the large plants, just as we did for UMPPs.”
He said that E&Y has been floating the idea to address the challenge of slow capacity addition in India as the country has been a net importer of steel since 2007.
Mr Agrawal said that just like UMPPs, government can set up Special Purpose Vehicles, while giving all the licenses, clearances and linkages unto it and then auction the SPV on the lines of recently done 3G spectrum bidding.
Mr Agrawal, however, refused to comment on what should be the plant size in India to be considered as mega. He said “This is an idea which appears viable, needs to be applied in the right earnest and with due sensitivity. We thought big for power sector through UMPPs. Now it is time to think something similar for steel.”
Mr Agrawal further said that the “money raised through auction must be applied inter alia, to build enabling physical and social infrastructure as well as capacity building of related communities in a sustainable manner.”
(Sourced from PTI)