Indian Express reported that expressing serious concern that the widening demand supply gap was leading to an increase in steel imports, the steel ministry is leaving no stones unturned in setting up Ultra Mega Steel Plants in the country.
According to the proposal, each UMSP will come with a yearly capacity of at least 10 million tonne and would be set up in mineral rich states of Orissa, Jharkhand, Maharashtra and Chhattisgarh.
A high level meeting to be convened by steel secretary Mr PK Mishra on April 26th 2011 will deliberate on a slew of proposals prepared by the ministry’s Joint Plant Committee to help entrepreneurs set up UMSPs.
As per report “The project of 10 million tonnes capacity will call for a direct investment of about INR 50,000 crore. Even if a debt equity ratio of 1.5:1 is considered, equity of INR 20,000 crore will have to be mobilized for a single project.”
It has proposed for a Steel Finance Corporation as a nodal agency to help set up steel plants on a fast track basis in the next few years.
Since such project would entail big investment, the ministry proposal is to set up SFC as a special purpose vehicle with an initial corpus of INR 1,500 crore. The SFC would be conferred the status of a non banking finance corporation. Each state would have a special purpose vehicle for a UMSP and would part finance setting up of such a plant.
The ministry plans to register SFC with the Reserve Bank of India on the lines of PFC, and it will be empowered with the flexibility to take loans and raise debt through infrastructure bonds.
(Sourced IndianExpress)
According to the proposal, each UMSP will come with a yearly capacity of at least 10 million tonne and would be set up in mineral rich states of Orissa, Jharkhand, Maharashtra and Chhattisgarh.
A high level meeting to be convened by steel secretary Mr PK Mishra on April 26th 2011 will deliberate on a slew of proposals prepared by the ministry’s Joint Plant Committee to help entrepreneurs set up UMSPs.
As per report “The project of 10 million tonnes capacity will call for a direct investment of about INR 50,000 crore. Even if a debt equity ratio of 1.5:1 is considered, equity of INR 20,000 crore will have to be mobilized for a single project.”
It has proposed for a Steel Finance Corporation as a nodal agency to help set up steel plants on a fast track basis in the next few years.
Since such project would entail big investment, the ministry proposal is to set up SFC as a special purpose vehicle with an initial corpus of INR 1,500 crore. The SFC would be conferred the status of a non banking finance corporation. Each state would have a special purpose vehicle for a UMSP and would part finance setting up of such a plant.
The ministry plans to register SFC with the Reserve Bank of India on the lines of PFC, and it will be empowered with the flexibility to take loans and raise debt through infrastructure bonds.
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