Vijayawada: In another attempt by the dispensation to undo what the predecessor government had done, the YSRC government appears to have abandoned the company Raya-laseema Steel Corporation Ltd (RSCL) floated by the previous TD government to develop an integrated steel plant in Kadapa.
The YSRC government has decided to float a different company, AP High Grade Steel Corporation, to develop the same steel plant.
Incidentally, it was on December 27 last that the then chief minister N. Chandrababu Naidu, had laid the foundation stone for the Kadapa steel plant and now Chief Minister Y.S. Jagan Mohan Reddy will again lay the foundation at a different spot in Kadapa on December 26.
The TD government had also appointed former Vizag Steel Plant, CMD, P. Madhusudhan as the CMD of RSCL. RSCL was formed as a 100 per cent public sector undertaking (PSU) towards the setting up of the steel plant as a joint venture with AP Mineral Development Corporation (APMDC) for taking up mining and supply of iron ore to the steel plant.
The private limited company was formed with a paid up capital of Rs 2 crore, divided into 2 lakh shares of Rs 10 each and the board was constituted, establishing a registered office at the corporate office of APMDC at Vijayawada.
RSCL had also called global tenders to prepare a techno-economic feasibility report for the integrated steel plant. The steel plant was to come up at an investment of Rs 15,000 crore to Rs 18,000 crore.
While Mr Naidu laid the foundation stone at M. Kambaldinne Village, Mylavaram mandal in YSR Kadapa district, Jagan will lay the foundation at Jammalamadugu.
The government had also got assurance from NMDC for the iron ore supply for the steel production.
The present dispensation also strongly feels that the previous TD government had laid the foundation stone to establish a steel plant at Kadapa hurriedly without any plan to raise funds and that the previous government had also not effectively worked with the union government to ground the project.
An integrated steel plant at Kadapa was assured by the centre in the 13th schedule of the AP Reorganisation Act. However, there has been no progress on the project on the ground as it was found not financially viable.
The previous government instead of pursuing the centre after the TD snapped ties with the BJP-led NDA, had laid the foundation to establish the steel plant on its own.
Section 93 (3) of the 13th schedule of AP Reorganisation Act said that SAIL shall, within six months of the appointed day, examine the feasibility of establishing an integrated steel plant in YSR district of the successor state of Andhra Pradesh.
In June 2015, SAIL submitted a financial feasibility report which indicated extremely weak financial feasibility. Therefore, a task force was constituted with representatives from states to find ways and means to increase the financial viability of the proposed steel plant. The task force appointed M/s Mecon, a central government PSU, as an independent entity to carry out the detailed financial feasibility.
BJP leaders then claimed that TD government didn't furnish the required details to MECON which was preparing the feasibility report for almost 6six months.