Five long years after two Chief Ministers laid foundations for it with much hype, construction of the three-Million Tonnes Per Annum (MTPA) integrated steel plant in Kadapa district (Kadapa Steel Plant - KSP) is showing little signs of progress due to a host of issues, mainly related to the supply of iron ore and creation of external infrastructure and some extraneous factors too.
The present government is hopeful that the steel plant establishment will gather pace in the near future once JSW Steel Limited (JSWSL) achieves financial closures and finalises the type of steel-making technology that best suits the project.
Chief Minister Y. S. Jagan Mohan Reddy had laid the foundation for the steel plant for the first time on December 23, 2019, at Sunnapurallapalle village in Jammalamadugu mandal, just about a year after his predecessor did it in 2018 at a different location (Kambaladinne village of Mylavaram mandal). Mr. Jagan Mohan Reddy had laid the stone for it for the second time at Sunnapurallapalle in February 2023.
The Steel Authority of India Limited (SAIL) was mandated under the 13th Schedule of the Andhra Pradesh Reorganisation Act, 2014, to examine within six months the feasibility of establishing a steel plant in Kadapa district. But, the KSP has so far remained a veritable pipe dream for multiple reasons.
It is pertinent to mention that Union Minister of State for Home Nityananda Rai had made a statement in Parliament as late as in July 2023 that the KSP was not technically and economically feasible.
It was in the latter half of the year 2018 that Mr. Naidu had given up asking the Centre to set up the KSP following differences with it over sourcing of iron ore and other logistical issues, and got Rayalaseema Steel Corporation floated as a Special Purpose Vehicle to establish the plant as a State government-owned entity, but nothing significant happened thereafter.
After coming to power in 2019, Mr. Jagan Mohan Reddy had reportedly managed to rope in the U.K.-based Liberty Steel Group and the Essar Group for establishing the KSP, but the project was stuck.
His government later formed a Joint Venture with the JSWSL for setting up the KSP, but the resultant company, JSWAP Steels Limited, had since made no progress, except for basic infrastructure works i.e. an approach road, a dedicated railway line (Nandyal-Yerraguntla) and high-tension power and water supply that were in various stages of execution.
However, N. Yuvaraj, State Government Secretary (Industries), is optimistic that the KSP will see the light of the day sooner than later.
He told The Hindu that the JSWSL was looking to adopt a scrap-based model for manufacturing steel with Japanese technology before the Central Government (NMDC) made iron ore available to it.
The proposed supply of ore from the close-by Obulapuram mines was not possible due to the legal wrangles in which Obulapuram Mining Company was caught. Being a diversified conglomerate, the JSWSL would be eventually able to procure iron ore, he expressed confidence.
Mr. Yuvaraj said the JSWSL was to tie up financial closures, and submit a DPR, which was being pursued by the State government as a year had passed since the JV was formed.
Besides, the A.P. Government was requesting the Centre to provide about ₹750 crore needed for external infrastructure creation, or get it done by the Central Public Works Department (CPWD) as the State could not afford to foot that bill under the given circumstances.
