Telangana State government drops 'unviable' Bayyaram Steel Plant?

Hyderabad : The state government has reportedly decided not to take up the Bayyaram Steel Plant with state funds since it is a cost intensive project and it may not be viable technically also since the quality of the ore in the forest region of the erstwhile Khammam district was said to be low.

After the Union government turned down the request of the state to set up the steel plant as promised under the AP Reorganization Act 2014, the TS government has constituted an official committee headed by Special Chief Secretary Ajay Mishra in June last year.

The committee was entrusted with the responsibility of conducting a feasibility study on the establishment of the plant.

The government entrusted the Public Sector Consultancy organization - MECON - to prepare a DPR (Detailed Project Report) on the steel plant and RVNL (Rail Vikas Nigam Limited) to submit the feasibility report on laying a railway line from Bailadilla (Chhattisgarh) to Manuguru (near Bayyaram) for the transport of the ore.

Top officials of the state government said that the study conducted by the committee has suggested to the government against the construction of a giant steel plant with the available financial and logistic support in the state.

It required at least Rs 10,000 crore to Rs 15,000 crore to set up a steel plant.

Since the availability of the raw material of the ore is of low quality, it also required to lay a separate railway line connecting Bayyaram with other iron ore mines in other parts of the country, mainly Bailadilla in Chhattisgarh, which will put heavy financial burden on the state.

"Unless the Centre extends the assistance, it will not possible to set up the steel plant by the state government alone," it suggested.

The possibility of private investments in setting up of the plant is also remote because the agencies will have to pool thousands of crores from the financial institutions, a senior official said, adding that the only option to realize the establishment of the project is the Centre's all-round help to the state.

"Under the Reorganization Act, the Union government has to fulfil its commitment to set up of the steel plant. The state government will revive the demand for the plant and pursue with the Centre soon," he said.

Chief Minister K Chandrashekar Rao has been demanding the Union government to fulfil the promise of the steel plant for Telangana in every meeting with Prime Minister Narendra Modi.

State Industries Minister KT Rama Rao also submitted many memoranda to the Centre under NDA-I rule. The TS government is getting ready to take up the issue with the NDA-II government again.