VIJAYAWADA: The State government on Wednesday signed a Memorandum of Understanding (MoU) with the National Mineral Development Corporation (NMDC) for the supply of iron ore to the AP High-Grade Steel Limited (Kadapa steel plant).NDMC director (Commercial) Alok Kumar Mehta and AP High-Grade Steel Limited chairman and managing director P Madhusudhan signed the MoU in the presence of Chief Minister YS Jagan Mohan Reddy at the latter’s camp office.
Under the agreement, the NMDC will supply five million tonnes of iron ore to Kadapa Steel Plant per year. To reduce cost, the NMDC will supply iron ore from the mines closer to the plant in the first phase.
Describing the agreement as historic, the Chief Minister, who is expected to lay the foundation stone for the steel plant on December 23, said it will help establish steel plant between Sunnapurallapally and Peddanandaluru villages in Jammalamadugu Mandal of Kadapa district.
The agreement was signed following an appeal made by the Chief Minister to Union Minister of Steel Dharmendra Pradhan during the latter’s visit to the State in November. Setting up of the steel plant in Kadapa district is one of the provisions in the AP Reorganisation Act, 2014.
However, the State government, which is pursuing the issue with the Centre, had allocated over 3,000 acres of land and issued orders incorporating a new company fully owned by it -- AP High-Grade Steels Limited -- for establishing the integrated steel plant.
The government had made efforts to invite potential private investors for establishing the steel plant and held discussions for working out a feasible Public-Private Partnership model for the project. As the PPP model failed to materialise, the government has decided to establish the plant on its own.
The State seeks certain incentives to the plant from the Centre including refund of IGST for the first seven years, income tax exemption for 10 years out of the first 15 years of operation and exemption of import duty for 10 years on capital goods and raw material imports.