State-owned SAILBSE 3.01 % is likely to exit the Rs 35,000-crore revival project of the Sindri fertiliser plant in Jharkhand due to inordinate delay in land acquisition.
The steel behemoth has already conveyed problems it faced in land acquisition to the Fertilizers Ministry, sources said.
Aspiring to have a 50-million-tonne (MT) steel capacity, Steel Authority of IndiaBSE 3.01 % (SAIL) came out with a plan to set up a new 1.15 MT per annum (MTPA) fertiliser plant, a steel mill of 5.6 MTPA capacity and a 1,000 MW power plant with a total of Rs 35,000 crore investment.
SAIL's proposal was also cleared by the Cabinet Committee on Economic Affairs (CCEA) in August, 2011 and a new company, SAIL Sindri Projects, was created in November, 2011 for the revival of the unit. The unit stopped production in 2002.
"Due to land encroachment issues, SAIL may surrender the project. Funding is also an issue for the PSU which has other commitments to fulfil. SAIL's exit may delay the revival of the project," a senior government official said.
A senior SAIL official said, "We have conveyed to the Fertilizers Ministry that the project has not moved much in the last four years and if the same situation continues, the company board may take a call on surrendering the project. No final decision has been taken yet. We are keeping our fingers crossed".
Getting the encroached land cleared at the Sindri plant is a herculean task. A large part out of total 6,652.6 acres is either encroached, leased/transferred, illegally occupied or falls on the river bed.
While factory and staff quarters are spread over 1,200 acres each, there are illegal occupants in about 3,000 staff quarters out of the 6,542 quarters in the plant premises.
Moreover, nearly 450 acres have permanently been given to BIT Sindri and over 200 acres have been leased to ACCBSE 0.34 % cement factory, while over 450 acres have been leased to the state government.
Additionally, nearly 470 acres are part of Gowai dam, over 550 acres of land are on the Damodar river bed and nearly 700 acres land has been leased to central PSUs. There are 26 villages on the factory land as well and displacing them is a
big task, sources said.
On the other hand, SAIL needs about 2,500 acres for the steel plant, about 1,000 acres for the fertiliser plant and 500 acres
for the power plant.
SAIL wanted to develop the three projects through special purpose vehicles. It had already identified National Fertilizers LtdBSE 0.34 % as partner for the fertiliser plant and was mulling to rope in others for steel and power ventures.