The merger of Steel Authority of India’s two under-rated key plants has now emerged as the lone resort to overcome the longstanding land dispute that stranded modernisation of Durgapur Steel Plant for four years.
The Steel minister, HD Kumaraswami, accompanied by his deputy Bhupathiraju Srinivasa Varma, during their maiden visit to Durgapur yesterday declared merger of sick Alloy Steels Plant (ASP) with DSP, an issue lying unresolved since 2023-24. The development, as the experts said, would secure adequate land required for DSP’s already delayed eastward horizontal brownfield expansion.
ASP accommodates 700 plus acres of unutilised land adjacent to the DSP barely a km away from the Faridpur locality that showed reluctance to vacate since 2020.
“I am looking forward for the day Prime Minister Narendra Modi will lay the foundation for the expansion of Durgapur Steel Plant, Kumaraswami said. He added: “We need to upgrade DSP’s production to 4.08 million tonnes by 2030 like how we want to upgrade IISCO from a 7 MT plant to 9 MT plant and the DSP-ASP merger initiative will gather momentum for sure and we are actively considering it.” He added: “The initiatives for the purpose has already begun.”
The ASP, in the wake of ensuing fast changing steel scenario, doesn’t seem viable alone and DSP failing to grow due to persistent land constraints, said senior SAIL officials. “Would now have an amicable solution for ASP’s survival and DSP’s growth together with this merger,” said Sanjay Arya, General Secretary, Steel Executives Federation of India that had put forward the merger demand way back in 2019-20 year.
SAIL had floated Expression of Interest for ASP, in November, 2021, which however earned a lukewarm response, though long-term lease or a Joint Venture for 30 years were offered. The potential investors were asked to infuse fresh investments between Rs 1,000 & Rs 1,500 crore for modernisation of ASP. With a capacity of 1.6 lakh tonnes, ASP has inconsistently been operating at less than 20 per cent capacity over a decade.
By 2023-24, SAIL internally decided to put EOI on hold and instead push for its merger with DSP and the sick plant, since 2021 is run by a General Manager of DSP. Dola Sen, TMC MP, who attended the consultative committee meeting said: “We had laid a proposal for a Rs 1,800 crore merger plan, which has finally been approved.”
DSP, a 2.2 MT plant, currently operating at 70 per cent capacity is facing a tough time as its much ambitious Rs 3,500 crore brownfield modernisation and upgradation project is still stranded since 2023-24. The expansion project planned to accommodate a new 1 MT Bar & Rod Mill with upgradation of its wheel & axle plant from current 50,000 sets to 72,000 sets annually.