VIJAYAWADA: In tune with Chief Minister YS Jagan Mohan Reddy’s November 26 announcement regarding the Kadapa steel plant, the State government on Wednesday issued orders for the setting up of an Integrated Steel Plant at Sunnapurallapalli and Peddanandluru villages in Jammalamadugu Mandal.
Establishing the Integrated Steel Plant in Kadapa is one of the provisions mentioned in the AP State Reorganisation Act, 2014.
However, the State government made an initial provision of Rs 250 crore in the 2019-20 Budget towards the establishment of the steel plant and also sanctioned Rs 62 crore for commencing various related activities. Land to an extent of 3,295 acres was identified in these villages.
Meanwhile, the State government also issued orders incorporating a company in the name of M/s A.P High-Grade Steels Limited for establishing the Integrated Steel Plant in Kadapa district. The “Certificate of Incorporation” was issued by the Ministry of Corporate Affairs.
The AP High-Grade Steels Limited, which is completely owned by the State government, was registered as a private company under the Companies Act, 2013 with an initial authorised paid up capital of `10 lakh. The registered office will be located at Infrastructure Corporation of AP (INCAP), Ibrahimpatanam. The subscribers to the Memorandum and Articles of Association, and the first directors are Principal Secretary (Industries and Commerce) Rajat Bhargava and Secretary (Mines and Geology) K Ram Gopal.
It might be mentioned here that the Chief Minister had urged the Centre for the linkage of iron ore for the steel plant with the National Mineral Development and received a positive response from the Union steel minister. The MoU to this effect would be signed next week.The detailed project report for the steel plant by MECON is expected to be ready by the fourth week of December.
Efforts have been made in the last couple of months to invite potential private investors for the plant. Meetings were held with various reputed steel companies and some have reportedly expressed their interest in the project. As such, the government is deliberating on a feasible Public Private Partnership model for the project. In the event if the PPP model does not materialise, the government is determined to establish the plant on its own.
To improve financial viability of the project, the government has sought certain incentives for the plant from the Centre. They include refund of IGST for the first 7 years, income tax exemption for 10 years of the first 15 years of operation and exemption from import duty for 10 years on capital goods as well as raw material imports.
Company formed
The government also issued orders incorporating a company in the name of M/s A.P High Grade Steels Limited for establishing the Integrated Steel Plant. It was registered as a private company under the Companies Act, 2013, but is completely owned by the State government