JSW LIKELY TO DEFER BENGAL STEEL PROJECT
By ceoaisra, Section STEEL TRADE NEWS
Posted on Sat May 23, 2009 at 01:14:20 AM EST
IT'S NOT official yet. But the signs are ominous. One of the state's most high profile industrial projects, the Rs40, 000-crore JSW Bengal Steel venture appears to be have been relegated to the back burner. In what could be the dearest indication of this, the JS W Group has reportedly asked Biswadip Gupta, its chief executive for the Bengal project, to focus his energies on the group's core steel businesses outside West Bengal in locations like Bellary, Karnataka. "I will now be shuttling between Bellary and Kolkata," Mr Gupta told The JSW Bengal Steel CEO was speaking amid rumours lately doing the rounds that he had put in his papers. The rumours had been triggered by after Mr Gupta stepped down from the JSW Steel board a few days ago. This coupled with the lack of progress in the West Bengal project appear to had stoked rumours about his resignation from JSW Bengal Steel. "I am still with the JSW group and have not put in my papers," he asserted when quizzed by. Regarding the status of the Bengal project, he said: "The group has already invested Rs 250 crore into the project. We have also completed acquisition of 43 00 acres at Salboni. We are now building the boundary wall." Insiders, however, hinted that with banks refusing to extend loans to new projects, "there is little chance of any progress on the steel venture at least for the next one year." For all practical purposes, the ongoing global financial crisis that led to funds drying up for green field projects, took a heavy toll on the prospects of the new venture. JSW Bengal was incorporated as a joint venture company to set up a 10 mt at Salboni in West Midnapore with the Sajjan Jindal group holding 89% and the remaining 11 % being held by the West Bengal government. The Jindal group was planning to set up the project in phases with a 3 mt capacity plant due to come up initially. On November 2,2008, the foundation stone laying ceremony for the project was attended by the chief minister Buddhadeb Bhattadiarjee and the-then steel minister Ram Vilas Paswan.Theevfntevfnt coming days after the Tata Nano project was with drawn from Singur, was supposed to mark the resurgence of industry' in the state. But it soon thereafter ran into rough weather and was unable to achieve financial closure for the first phase investment of Rs 3,000 crore.
