SAIL to revive Amethi steel plant

In the presence of Rahul Gandhi, union steel minister Ram Vilas Paswan today launched the project for rebuilding of the steel plant launched by the now defunct Malvika Steel at Jagdishpur Industrial Area in Uttar Pradesh. The plant, which lies in Gandhi's pocket constituency of Amethi, has been taken over by the Steel Authority of India Ltd.

The erstwhile Malvika Steel, promoted by the Usha group in 1995-96, produced pig iron for about two years before it shut down in early 1998. After an open bid held under the directions of the Delhi High Court and the debt recovery tribunal, SAIL took over the sick unit by paying back Malvika Steel's debts of Rs209 crore to the Industrial Finance Corporation of India. SAIL expects to invest another Rs400-500 crore in the plant.

The original promoters had envisaged the construction of a steel melting shop, caster, oxygen plant, sinter plant and rolling mill. However the main facilities in operation at the time of closure included two blast furnaces of 350 cu m each, 2x1200 tonnes per day pig casting machines, and a 7.8 mw captive power plant.

Studies will be carried out to work out the product mix and other details.

The plant's proximity to vast consuming centres in UP is considered an advantage for SAIL. The restructuring is expected to create employment for over 1,000 people, including local residents of Amethi.

Speaking at the launch, Paswan said that for last few years the steel ministry had been working on modalities for reviving the erstwhile Malvika Steel. He said construction would be started soon, and the plant is expected to start operation on 26 January 2011.

Paswan said that SAIL, as the largest steel producer in the country, has always played a vital role in nurturing sick units like the Visvesvaraya Iron and Steel Plant, Karnataka, the Indian Iron & Steel Co (IISCO), West Bengal and Elektrosmelt Ltd (MEL), Maharashtra.

Talking about the steel scenario, Paswan said the high demand for steel in sectors like infrastructure, automobiles and real estate have given a boost to the industry, and today India is the world's fifth largest producer of steel, producing about 55 million tonnes of crude steel.

Rahul Gandhi said for last five years he had been concerned about the revival of Malvika Steel, and today his dream had come true.

Steel Authority chairman S K Roongta said on the occasion that it has been provided with an opportunity to rebuild Malvika Steel, which has been closed for 10 years. He said that SAIL would not only reconstruct the plant but also play the role of a model corporate citizen.

The Amethi plant, which is spread over 750 acres and includes a whole township, will begin operations in a few months, he had said yesterday. This is the largest steel manufacturing unit in Uttar Pradesh. Of the 19 such industries in UP, eight are sick and are closed. "This is the first of the sick industries to be revived in UP," he said.

Malvika Steel has a capacity to produce 8.5 lakh tonnes of steel. SAIL, which employs 1.25 lakh employees, has decided to prepare the proposed project report within three months, which will then be approved by SAIL's board, the official said.

Once the unit resumes operations, it is expected to generate huge business prospects and employment for residents at Amethi and nearby areas.