Close on the heels of Posco and ArcelorMittal pulling out of $18 billion projects, domestic steel firm Monnet Ispat and Energy is actively considering scrapping its proposed 1.5 million tonnes plant in Jharkhand.
The city-based sponge iron and power producer has proposed 1.5 million tonnes per annum (mtpa) greenfield steel plant in Jharkhand. It is now considering withdrawing the plans for want of raw material, water and land - the same reasons cited by both ArcelorMittal and Posco as well.
"Yes, it is correct that we are seriously considering to withdraw from the Jharkhand greenfield project," said Amitabh Mudgal, Senior vice president (Marketing and Corporate Affairs), Monnet Ispat and Energy.
Monnet Ispat, which is setting up a 1.5 million tonnes per annum (mtpa) steel plant in Chhattisgarh, had signed an MoU with Jharkhand government in 2003 to set up a DRI-based 1.5 mtpa steel plant at Hazaribagh with Rs. 1,400 crore investment on 500 acres of land.
Monnet's problems started with land acquisition issues. Following signing of the MoU, the Jharkhand government had created a nodal agency (Jharkhand Infrastructure Development Corporation) JIDCO to acquire the land for the project.
Monnet had deposited the desired amount. However, after three years, JIDCO was dissolved and Monnet was advised to go for purchase of land directly.
"We started to work on land acquisition in Hazaribag and were later told that water is not available at this site. So, we changed the project site to Chas Block in Bokaro district with assurance from the state that required water will be made available from the Damodar river," Mudgal said.
However, when the company was ready to register the land following the "tedious process of verifying ROR (Record of Rights) and making all efforts", the state government informed it that water could not be made available from the river.
On the iron ore front also, Monnet said, the state had backtracked from the earlier promises.
Mudgal said the state government had recommended to Centre for allocation of Ghatkori Iron Ore mine to Monnet Isapt, only to withdraw later saying the area has been reserved for state-owned firms. Monnet took the matter to court, but lost the case.
"It seems Jharkhand does not require industry. We briefed all this to Inter Ministerial Group meeting in the Ministry of Steel that in the absence of water and iron ore, it is not possible for to move ahead," Mudgal said.
However, unlike Posco or ArcelorMittal, which pulled out their cumulative Rs. 80,000 crore investment proposal in Jharkhand and Odisha respectively, Monnet does not want to loose hope in Jharkhand even now.
"In case the government of Jharkhand assures us for water and other inputs; we still are open to go ahead with the project in Jharkhand," Mudgal said.