Nitin Gadkari Cautions Steelmakers Against Profiteering, Says Projects Getting Unviable
Nitin Gadkari at an event in New Delhi, India. (Photographer: Anindito Mukherjee/Bloomberg)

Nitin Gadkari Cautions Steelmakers Against Profiteering, Says Projects Getting Unviable

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Cautioning against profiteering by steelmakers, Union Minister Nitin Gadkari on Thursday said he has sought Prime Minister Narendra Modi's attention towards 55% hike in steel prices by players during the past six months, making projects unviable.

The road transport, highways and small industries minister also said if the players failed to curb the practice, the government will have to change policies and encourage alternative technologies in projects.

Addressing the Assocham Foundation Week, Gadkari also said a GPS system for tolling is on the anvil in which toll payments will be deducted automatically on the distance traversed.

"There has been a 55% hike in steel prices in the past six months. I have written to PM and Steel Minister (Dharmendra Pradhan) for a decision on this," Gadkari, who earlier warned cement makers against cartelling, said.

He also said a long-term policy is needed for it as the prices hiked did not match raw material and labour prices.

"A long-term policy is needed for steel and cement manufactures... a uniform policy," he said and added that had the price hike been in the range of 15-20%, it could have been justified but it was abysmally high.

"They can enhance productivity and earn profit. Else, projects will become unviable," he said and elaborated that steel and cement accounted for 40% of the project cost.

Also read: Nitin Gadkari Calls Out Delayed Work Culture At NHAI, Says ‘NPAs’ Need To Be Weeded Out

The minister said that meanwhile, alternatives are being explored for steel like Malaysian ad Singapore technology and added that earlier, when cement makers started profiteering, he had to stop 100% concrete roadbuilding and revert to bitumen model.

"This kind of attitude by players is not good for infrastructure and real estate," he said.

The minister also said the GPS-based system will be introducted for toll collection with Russian expertise where toll amount will be deducted from the commuter account or e-wallet on the basis of distance traversed.

This will be rolled out within two years, he said.

He also exuded confidence that toll collection will reach Rs 1.34 lakh crore in the next five years.

He also announced that the government has decided to extend viability gap funding to sectors other than infrastructure, with 40% of the share by the government and the rest by developers whether it be social sector, health or education.

Also read: ICRA Says Toll Collection On National Highways Likely To Fall 5-7% In FY21

Elaborating various reforms to make projects viable, the minister said tweaking of norms has resulted in savings to the tune of Rs 5,000 crore in just Zojila tunnel.

He said a hill city is being planned on a 19-km stretch between Zojila and Z-Morh tunnels.

"The 19-kilometres area between Zojila and Z-Morh is a very beautiful area. Four-metre ice is there and it is more beautiful than Davos in Switzerland. My idea is to make it more beautiful than Davos. I want to make a new hill city there," the minister said.

He added that the government is planning for that and a meeting is scheduled with Leh, Ladakh and Jammu & Kashmir governments. "A collaboration has been made with a Swiss Architect."

He said idea is to develop resorts, hill stations and conference halls there to attract global tourists.

About electric vehicles, he said a huge investment of Rs 12.5 lakh crore is envisaged in the sector and the number of such vehicles is bound to rise.

Focus is also on taking the ethanol economy to Rs 2 lakh crore from the current Rs 22,000 crore, to cut on Rs 8 lakh crore imports of crude.

Also read: Why Steelmakers Are Set To Get An Earnings Boost In Pandemic-Hit Year

On National Infrastructure Pipeline, he said keeping the PM's vision of India becoming an $5-trillion economy in the next 5 years, the government has launched the National Infrastructure Pipeline, under which it has planned to invest Rs 111 lakh crore on infra projects by 2024-25.

The NIP is a first-of-its-kind exercise to provide world-class infrastructure across the country and improve the quality of life for all citizens, he said.

Highlighting various key initiatives undertaken by the government to encourage the infrastructure space such as the TOT (toll-operate-transfer) and BOT (build-operate-transfer) models, Gadkari said these have achieved global appreciation from the investor community.

He said 2,478 projects worth Rs 20.33 lakh crore are under the Ministry of Road Transport and Highways under NIP.

About the power sector, he said several reform initiatives have been taken.

The minister also said Indian investors would be preferred in TOT projects.

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