ROURKELA: The proposed expansion plan of the Rourkela Steel Plant (RSP) of SAIL to more than double its production capacity has come as a fresh breath of air for all. However, the proposal that envisages capital expenditure of above Rs 30,000 crore to augment its hot metal production capacity from the present 4.5 MTPA to 9.3MTPA is also dependent on early resolution to land hurdles.
The proposal is pending approval of SAIL’s Corporate Office. With the Steel Ministry’s vision of augmenting country’s steel production from the present 120 MTPA to 300 MTPA by 2030, the SAIL is devising strategy to further scale up production capacities of its integrated steel plants including RSP. Accordingly, on SAIL’s advise, the RSP had submitted its plan about 10 months ago.
Reliable sources said while RSP’s economic and technical performances are very high to grab the expansion opportunity it is worried about land issues as it needs around 2,000 acres of contiguous land parcels beyond its existing boundary. The land parcels acquired decades ago are under encroachment and not in physical possession of RSP, sources said.
In the financial report of SAIL for 2021-22, the public sector steel major has reported an all-time high net or Profit After Tax (PAT) with Rs 12,015 crore. Incidentally, RSP’s net profit contribution was also an all-time high of about Rs 4,760 crore.
Sources further said RSP is the preferential choice of SAIL due to its track record of timely completion of the last modernization and expansion projects between 2008 and 2013 with expenditure of about Rs 14,000 crore. The expansion saw RSP’s capacity rise to 4.5 MTPA plant from 2 MTPA.
For the proposed capacity expansion, SAIL would borrow money from the market and the plants going for expansion would have the pre-condition of ensuring timely operation of new production units to avoid paying high interest cost, sources said, adding, if RSP fails to ensure encumbrance free land then other steel plants including ISP and DSP or BSP could be the possible gainers.
It is learnt from RSP sources that the management is seriously pursuing the land issue with the Sundargarh district administration for the proposed expansion. The then Rourkela ADM Dibyajyoti Parida in September 2021 had told this paper that about 6,000 families would have to be evicted from 55 slums on RSP land and the administration was planning their rehabilitation with affordable housing scheme on PPP mode for which RSP would provide land. While some of the slums are reportedly located within RSP boundary, it would need about 2,000 acres more towards Barkani, Deogon and Jharbahal.