December 31, 2008

Jai Balaji gets land for West Bengal steel project

KOLKATA, 29 December: The West Bengal government on Monday allotted 748.97 acres to Jai Balaji Industries for setting up a five-million-tonne integrated steel plant at Raghunathpur in Purulia district. "We will get another 250 acres over and above this within the next 10-15 days," company chairman and managing director Aditya Jajodia said after receiving the land allotment order from state industries minister Nirupam Sen.

Altogether 3,700 acres are required for the project. The first phase of the Rs 16,000-crore project comprises a two-million-tonne steel plant, a 400 MW power plant and a one-million-tonne cement plant, Jajodia said. The total investment for the first phase will be Rs 4,000 crore, out of which Rs 1,500 crore will go towards setting up the power plant, Rs 200 crore for the cement facility, and the remaining Rs 2,300 crore on the steel plant.

"The total project cost has come down by 30 per cent and that of the first phase by 25 per cent because of developments in domestic and international markets," he said. The company expects additional turnover of Rs 5,000-6,000 crore from the first phase, which will be completed within 36 months of the start of the project. "We will start working on the project within 15-20 days," Jajodia said.

The total project will comprise a five-million tonne integrated steel plant, three-million tonne cement plant and a 1,215 MW captive power plant. Jajodia said the project involves a debt-equity ratio of 2:1, with a Rs 700-crore loan having already been secured from a consortium of 20 banks. Non-coking coal, which will be supplied by the West Bengal Mineral Development and Trading Corp, will constitute 60 per cent of the total coal requirement.
Jai Balaji Group also said it would raise Rs 700 crore from a consortium of 20 banks to part finance its Rs 4,000 crore first phase work in Purulia. “We have already tied up Rs 700 crore from a consortium of 20 banks. This will be used to part finance our Rs 4,000 crore first phase of work in that area,” a company official said.

The group plans to fund the proposed investment in the 2:1 debt-equity, he said. The official said that Jai Balaji Group plans to start the construction work on the project “as soon as possible” and complete the first phase in the next 36 months. It has received close to 750 acre from the West Bengal Industrial Development Corporation and hopes to get an additional 250 acre from it in the next one month.

“Around 1,000 acres is required in the first phase, while our requirement is 2,700 acres for the entire project,” the official said. Jai Balaji Group plans to invest Rs 16,000 crore in the project to put up a five million tonne integrated steel plant, th ree million tonne steel plant and 1,215 MW power plant for captive consuption.

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