IE reported that the India steel industry may be elated with the government’s proposal to set up Ultra Mega Steel Plants but the steel ministry appears to be in no mood to offer undue largesse to them.

Though UMSPs would be given raw material security on a priority basis the Special Purpose Vehicles setting them up could secure captive mines only through competitive bidding process at market prices.

Steel ministry officials said that “Obtaining necessary linkages by the SPVs would not be conditional on reserving mines for the UMSPs for next 50 years. The prospective investors will have to pay market determined price for the bidding process, the values of which will get reflected in the auctioned price of the SPV. If priority allocation is accepted without this condition, it may be in conflict with the objective of creating a self-sustaining institution.”

The ministry is currently deliberating on a proposal from its Joint Plant Committee to set up UMSPs in mineral rich states through SFC, which would have an initial corpus of INR 1,500 crore.

Each UMSP would be of at least 10 million tonne per annum capacities and would require an estimated INR 50,000 crore each.

(Sourced from www.indianexpress.com)