The government has conditioned any fresh investment in Steel Authority of India Ltd. (SAIL) and Rashtriya Ispat Nigam Ltd. (RINL) on their completion of existing projects and earning returns from investment.
Union Steel Minister Chaudhary Birender Singh had earlier rapped the country’s largest steelmaker, SAIL, for slow progress in modernisation and capacity ramp-up as deadlines were missed.
When asked if the steel companies are planning any fresh investments, Steel Secretary Aruna Sharma told PTI in an interview, “For the coming three years, they (SAIL, RINL) must complete their incomplete projects and start getting return on their investment. (It's) a must. There cannot be anything (fresh investments).”
The cumulative expenditure by SAIL on modernisation and expansion activities till December last year was to the tune of Rs 64,562 crore.
"At this moment, first, they have to first complete it... Already, SAIL has put Rs 60,000 crore. RINL has put Rs 17,000 crore. So, they must start getting return on their investment. It is very important," the secretary stressed.
The delays in projects by SAIL and RINL, she observed, have put both at a disadvantage.
"After all, when you are in a race and... when you are a weak player, then you have to tighten your belt from every corner. You can't afford to be weak and that is very clear... Now, they (SAIL and RINL) have to gear up. They have no option, but to gear up," Sharma made it clear.
SAIL has undertaken modernisation and expansion of its integrated steel plants in Bhilai, Bokaro, Rourkela, Durgapur and Burnpur and the special steel plant in Salem.
"While they plan this kind of investment, there are some major gaps. So, they will have to cover those gaps and make sort of the whole system absolutely commercially viable and then they are into expansion mode," Sharma added.