DRAFT INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 MECON LIMITED RANCHI- 834002 JULY, 2014 (R0) No. 11.14.2014.PP 2151 JUNE, 2015 (R1) DRAFT JOINT PLANT COMMITTEE Ministry of Steel, GOI INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 MECON LIMITED Ranchi – 834002 No. : 11.14.2014.PP 2151 JULY , 2014 (R0) JUNE, 2015 (R1) INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 GOVT. OF INDIA, MINISTRY OF STEEL PREFACE It is largely being felt now by Country’s policy makers that manufacturing has to be the backbone of future growth strategy of India over the next decade. Accordingly, the new manufacturing policy aims at increasing manufacturing growth rate to 11-12% by 2016-17 and raising its share in GDP from current 16% to 25% by 2025. The policy envisages creation of National Investment & Manufacturing Zones (NIMZs) equipped with world class infrastructure facilities to promote manufacturing activities in the country. To achieve the manufacturing growth of GDP’s share from 16% to 25% by 2025, there will be substantial increase in steel demand. Some of the NMIZs are being planned in mineral rich states offering excellent potential location for setting up new steel plants. Draft National Steel Policy 2012 targets crude steel capacity of 300 Mt in the country by the middle of the next decade (2025-26). A High Level Committee on Manufacturing (HLCM) in its meeting held on 9th July 2013 which was chaired by the then Hon’ble Prime Minister endorsed the growth strategy targeting National Mission of 300 Mt crude steel output by 2025-26. In order to give a boost to the industry, infrastructure is a prerequisite and needs to be given immediate focus. Against this backdrop, Joint Plant Committee, Ministry of Steel, Govt. of India entrusted MECON to undertake the study report for the infrastructure requirement for eastern zone of India by 2025. The present report prepared by MECON encompasses a comprehensive range of issues concerning infrastructure in the eastern zone of India which includes inter-alia vision for steel, power, mining etc., raw material requirement, development of mines & linkages, power & water requirement, environmental sustainability / considerations, current status vis-a-vis future vision for infrastructure, human resource status & future needs, investment needs, financing & PPP mode for implementation of infrastructure projects as well as way ahead. The report is based on desk study / preliminary assessment / analysis of information available with MECON. No. : 11.14.2014.PP 2151 © 2015 MECON Limited, All rights reserved INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 GOVT. OF INDIA, MINISTRY OF STEEL ACKNOWLEDGEMENT MECON expresses its sincere gratitude to Joint Plant Committee, Ministry of Steel, Govt. of India for reposing confidence and entrusting with the challenging task of preparing a infrastructure study report for the eastern zone of the country. MECON gratefully acknowledges the valued guidance and unstinted support received from Hon’ble Secretary, Joint Secretary and other officials of Ministry of Steel, Govt. of India as well as senior officials of Ministry of Railway, Govt. of India during the course of preparation of the study report. MECON also thankfully acknowledges the valued contribution and support extended by the senior officials of SAIL, Tata Steel and JSPL. MECON further wishes to place on record its deep appreciation to the following agencies for providing data, reference material, maps, etc from secondary sources which were used as input for preparation of the present report : 1. Dedicated Freight Corridor Corporation of India Ltd. 2. Indian Railways / Railway Budget 3. Ministry of Road Transport & Highways 4. National Highways Authority of India 5. Planning Commission (erstwhile) 6. Maritime Agenda 2010-2020, Ministry of Shipping 7. Various ports 8. State roads & highways departments of Jharkhand, Odisha, Chhattisgarh, West Bengal &Andhra Pradesh 9. Water resources departments of Jharkhand, Odisha, Chhattisgarh, West Bengal & Andhra Pradesh 10. Inland Waterways Authority of India 11. Ministry of Water Resources 12. National Water Development Agency 13. Ministry of Statistics and Programme Implementation 14. Department of Industrial Policy & Promotion 15. IBM Year Book State Review 2012 16. Maps of India No. : 11.14.2014.PP 2151 © 2015 MECON Limited, All rights reserved INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 GOVT. OF INDIA, MINISTRY OF STEEL Hkkjr ljdkj] bLikr ea=ky; Contents PAGE 1. Background 1 2. Vision for Steel Industry 1-3 3. Raw Material Requirement, Development of Mines & Linkages 3-7 4. Power & Water Requirement 7-8 5. Environmental Sustainability of Proposed Measures 8-14 6. Current Status Vis -À-Vis Future Vision for Infrastructure 14 -28 7. Human Resource Status & Future Needs 29 -32 8. Investment Needs, Financing & PPP Mode for Implementation of 32 -42 Infrastructure Projects 9. Way Ahead 43 -45 Annexures Annexure S1 Plant Location – Existing & Probable Eastern India & Rest of India Annexure M1 Major Iron Ore Zones of the Country Annexure M2 Statewise Iron Ore Resource Status Annexure M3 Iron Ore Resource of the Country Annexure M4 Major Coal Deposits of India Annexure E1 Resource Requirements for Producing 1.0 Million tonnes Steel by Conventional Route and By Ship-Recycling Route Annexure R1 Dedicated Freight Corridor Route Annexure R 2 Outcome of Discussion with Railway Board (Ministry of Railways), Ministry of Steel, DFCCIL, MECON and Major Steel Manufacturers Annexure R 3 Dedicated Steel Corridor Annexure P1 Port wise current capacity and planned capacity for the year 2020 Annexure M5 Existing / On - going/ Possible Slurry Pipeline Routes Annexure M6 Slurry Transportation – Possible Route Annexure G1 LNG Terminals and Natural Gas Pipeline Infrastructure In India (Existing & Planned up to 2025) Annexure G2 Proposed LNG Terminals and Natural Gas Pipeline Infrastructure In Eastern India Annexure W1 Water Scenario Annexure IW1 Inland Waterways Annexure H1 Response of task force members on “Infrastructure for Steel Sector” Appendix Appendix I Annual Projected Traffic of Major Materials in Eastern Sector Appendix II Indian Railways proposal for Accelerated Development in the region – Proposed Steel Freight Corridor Appendix III Proposed Steel Freight Corridor showing last mile connectivity No. : 11.14.2014.PP 2151 © 2015 MECON Limited, All rights reserved INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 GOVT. OF INDIA, MINISTRY OF STEEL Hkkjr ljdkj] bLikr ea=ky; 1. BACKGROUND It is largely being felt now by Country’s policy makers that manufacturing has to be the backbone of future growth strategy of India over the next decade. Accordingly, the new manufacturing policy aims at increasing manufacturing growth rate to 11‐12% by 2016‐17 and raising its share in GDP from current 16% to 25% by 2025. The policy envisages creation of National Investment & Manufacturing Zones (NIMZs) equipped with world class infrastructure facilities to promote manufacturing activities in the country. To achieve the manufacturing growth of GDP’s share from 16% to 25% by 2025, there will be substantial increase in steel demand. Some of the NMIZs are being planned in mineral rich states offering excellent potential location for setting up new steel plants. Draft National Steel Policy 2012 targets crude steel capacity of 300 Mt in the country by the middle of the next decade (2025‐26). A High Level Committee on Manufacturing (HLCM) in its meeting held on 9th July 2013 which was chaired by Hon’ble Prime Minister endorsed the growth strategy targeting National Mission of 300 Mt crude steel output by 2025‐ 26. In order to give a boost to the industry, infrastructure is a prerequisite and needs to be given immediate focus. In view of the above, Ministry of Steel entrusted MECON to carry out study report for the infrastructure requirement to achieve 300 MT steel by 2025. 2. VISION FOR STEEL INDUSTRY The total installed crude steel capacity of the country is 98.3 Mt, of which 68 Mt is concentrated in the Eastern zone. Out of total projected crude steel capacity of 300 Mt in the country by 2025‐ 26, Eastern zone contribution would be significant at around 244 Mt. State‐wise break‐up is depicted as follows : Crude Steel Installed Capacity (All India vis‐a‐vis Eastern Zone) (Mt) Sl States Present Projected Additional Projected Total No Capacity Capacity Capacity (by 2025‐26) (by 2025‐26) A Eastern Zone 1 Jharkhand 20.5 56.8 77.3 2 Odisha 16.2 59.4 75.6 3 Chhattisgarh 18 17.3 35.3 4 West Bengal (partly) 7.3 23 30.3 5 Andhra Pradesh (partly) 6 19 25 Sub‐total (Eastern Zone) 68 175.5 243.5 B Rest of India 1 Karnataka 14 15.5 29.5 2 Gujarat 11 1.3 12.3 3 Maharashtra 5.3 8.9 14.2 Sub‐total (Rest of India) 30.3 25.7 56.0 All India 98.3 201.2 299.5 No. : 11.14.2014.PP 2151 1 © 2015 MECON Limited, All rights reserved INFRASTRUCTURE STUDY REPORT FOR 300 MT STEEL BY 2025 GOVT. OF INDIA, MINISTRY OF STEEL Hkkjr ljdkj] bLikr ea=ky; The current crude steel installed capacity in the country is around 98.3 Mtpa. Steel sector has to grow at around 10% pa to achieve the target of 300 Mt over next 12 years. This is a challenging task. The country would need to address issues / challenges pertaining to demand prospects (domestic/export), robust/consistent GDP growth of over 8% pa, long term raw material security, technology, environment management and R&D issues, infrastructure & logistic support, trade policy issues, human resource / skill up‐gradation, pace of project implementation, requirement of financial resources & elimination of policy level bottlenecks. Based on the suggestions of National Manufacturing Competitiveness Council (NMCC) to reduce the time required for development of Greenfield sites for setting up steel projects, Ministry of Steel is contemplating to adopt Special Purpose Vehicle (SPV) model for awarding projects to investors in the steel sector.