ISSN (Print) - 0012-9976 | ISSN (Online) - 2349-8846

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STEEL-More Room for Private Sector

the government has decided to liberalise the licensing policy and allow the private sector to set up steel plants using the blast furnace route, subject to a capacity ceiling of 2,5 lakh tonnes. This follows the decision to shelve the idea of setting up two green- field plants, each with a capacity of two million tonnes per annum, at Daitari in Orissa and Vijaynagar in Karnataka. Since the public sector Steel Authority of India (SAIL) is finding it difficult to raise Rs 15,000 crore for its modernisation programme, finding resources to the tune of Rs 20,000 crore for the two new plants was not considered a feasible proposition. Hence the government decided to dilute the Industrial Policy Resolution of 1956 and allow the private sector entry into blast furnace steel production which was so far reserved for the public sector. Announcing this decision on May 29, the steel and mines minister, Dinesh Goswami, stated that the small blast furnace technology is now available within the country and hence there is no reason to keep the private sector out of this route for pig iron and steel making. As a further measure of liberalisation, the government announced on June 6 a new comprehensive set of guidelines for the secondary steel sector. Under these guidelines, the existing electric arc furnace units would be allowed to expand to the minimum economic scale (MES) capacity of 1,50,000 tonnes per annum of steel ingots/concast billets/blooms and slabs subject to a capacity ceiling of 2.5 lakh tonnes on the following conditions; power assurance from the state electricity boards, installation of modernisation facilities like high power transformer, water-cooled roof side walled panels, continuous sponge iron changing system and continuous casting machines. Units which are not in a position to achieve the MES capacity of 1.5 lakh tonnes straight away but would still like to expand and modernise will be permitted to do so provided the expansion involves an increase of at least 150 per cent in the existing installed capacity. It has also been stipulated that if an existing electric arc furnace unit wants to go in for modernisation, it will have to use not less than 30 per cent sponge iron in place of metal scrap. If a unit wants to install arradditional electric arc furnace, the new furnace will have to use at least 70 per cent sponge iron.

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