Three Tata Steel projects suffer major delays

Tata Steel's greenfield projects in Jharkhand, Orissa and Chhattisgarh have been delayed by about 12 to 16 months due to issues over land acquisition and resettlement, the company's executives said.

The company plans to invest about Rs 90,000 crore (Rs 900 billion) in the three projects, which will have a total capacity of 23 million tonnes.

Speaking to journalists today on the sidelines of Steelrise 2008, a three-day conference, the company's Chief Operating Officer H M Nerurkar said that all the projects were delayed.

Construction work has not started on the first project, which was to go on stream in Kalinganagar (six million tonnes). About 400 families are yet to be re-settled for the project.

Equipment costing about Rs 10,000 crore (Rs 100 billion) had already been ordered for the Kalinganagar plant, said Amit Chatterjee, advisor to Tata Steel Managing Director B Muthuraman.

The project would be spared some cost overruns as the equipment was ordered some time back. Still, the equipment is expected to come this year and there could be penalties if it was not cleared in time from the ports.

Nerurkar was optimistic about the construction work starting by March-end.

In Orissa, the company is yet to get recommendation for iron ore mines for its project in the state. The state government was assessing the mines that Tata Steel already has there, Nerurukar said.

The scenario is no better for the company's proposed five million tonnes plant in Chhattisgarh.

According to Varun Jha, vice president, Chhattisgarh project, the first phase is planned to be commissioned by 2011 and the second phase by 2015. But the project has been delayed on account of litigation over mines. About two-thirds of the residents have accepted the compensation package. Investments would depend on when the project would start, Jha said.

Addressing a seminar at the steel conference, Partha Sengupta, vice president (corporate services), Tata Steel, who is in charge of the Jharkhand project, pointed out that applications for land acquisitins were made a year and a half ago.

However, the state government was yet to announce a rehabilitation and resettlement (R&R) package, which was necessary for land acquisition, he said.