Cabinet nod for revival of FCI’s Sindri unit

KOLKATA: The Cabinet Committee on Economic Affairs ( CCEA) on Friday approved Steel Authority of India’s (SAIL’s) proposal for revival of the Sindri unit of Fertiliser Corporation of India at an investment of nearly Rs 35,000 crore. SAIL has been selected on nomination basis for allocation of land to set up a steel, power and fertiliser plants at the site.

The proposed revival plan envisages setting up of a 5.6 million tonnes per annum (mtpa) greenfield steel making plant at an investment of Rs 26,000 crore. It would also include and a 1.15-mtpa fertiliser plant with investment of Rs 4,450 crore. In addition, the plan also envisages setting up of a Rs 4,000-crore power plant.

The total land available with FCIL at Sindri is 6,652.6 acres, out of which about 5,481.6 acres will be now available for the proposed project. Commenting on the CCEA clearance, Sail chairman CS Verma said: “We are planning to create a dedicated project office to monitor the different areas and expedite the Sindri project within 42 months of getting all clearances.”

The entire project will be spearheaded through a special purpose vehicle (SPV) with a PSU character. It will have three subsidiaries catering to the proposed steel, fertiliser and power plants. The Sindri project will create direct/indirect employment potential for more than 5,000 people.

For all practical purposes, Friday’s Cabinet decision paves the way for SAIL’s plan to expand its production capacity in Jharkhand. A few years earlier, the steel major had promised to invest in value addition in Jharkhand by setting up a greenfield unit while pursuing the prized Chiria iron ore mines in the state. SAIL now owns 70% of the leases in Chiria (seven out of 10 mines), while the remaining three mines are on deemed lease.

The Union Cabinet decision will provide significant strategic advantage to SAIL. Under the plan, the proposed steel plant will have a diversified flat product-mix catering to the highend steel market. With major growth expected from steel-using sectors like oil & gas, auto and power, SAIL plans to produce new products like auto-body grades. While 4.2 mt capacity of the plant is proposed to be dedicated for production of hot rolled products, around 1.2 mt will be earmarked for cold rolled items.

Apart from the steel unit, a 1.15 mtpa gas-based urea plant will be set up after dismantling and disposing of the existing urea plant at the site. While the government has already given its in-principle consent to allocate natural gas for the project, SAIL has said it is scouting for a suitable partner for setting up the fertiliser project.