November 20, 2008

TATA Steel assessing project cost overruns

BS reported that TATA Steel is in the process of assessing the cost overruns in its Greenfield projects at Jharkhand, Chhattisgarh and Orissa entailing 23 million tonnes capacity. Earlier, the company had estimated an investment of around INR 90,000 crore for the three projects.

Mr H M Nerurkar COO of TATA Steel on the sidelines of TATA Metaliks annual general meeting said that we are in the middle of assessing the cost overrun.

He said that “Even though we have ordered the equipments for Kalinganagar, there will cost on the civil and construction work.” He added that, the construction for the 6 million tonne Kalinga Nagar project is expected to start next month and mine allocation for the project is also awaited. Mr Nerurkar said that negotiations with the families who were yet to move from the project site were underway. The project was a year behind schedule.

In Chhattisgarh, where TATA Steel plans to set up a 5 million tonne plant, the company has got iron ore mine allocation but the land had not been acquired. According to the original plan, the first phase of the Chhattisgarh project was to be commissioned by 2011 and the second phase by 2015.

In Jharkhand, there was no progress as the state government was yet to come out with a rehabilitation and resettlement policy. Applications for land had been made more than a year and a half back but there could be no progress as the R&R policy which had been drafted by the previous government had not been notified.