AM/NS India to get Rs 28,000 crore sop from Andhra Pradesh for new steel plant

Mumbai: AM/NS India is set to get incentives worth up to Rs 28,000 crore from the government of Andhra Pradesh for the first phase of the integrated steel plant the company plans to set up in the state, sources aware of the development said.

AM/NS, the fourth-largest producer of steel in the country, has begun the land acquisition process at Anakapalli in Andhra Pradesh, where its greenfield plant will have an initial capacity of 7.3 million tonne.

These incentives will be spread over a period of 20 years, and contingent upon the company sticking to definite timelines for implementing the project, the investment involved and the number of jobs it is expected to generate, they said.

The incentives planned include exemption of stamp duty and registration fees for the land purchased, 100% reimbursement of net State and Goods Services Tax and sales for a period of 15 years and an exemption on electricity duty for a period of 15 years.

Other incentives to be provided by the state government include the reimbursement of power at a rupee per unit for a period of 15 years, and supply of industrial water at 50 rupees per KL for a period of 10 years.

The steel producer will invest close to Rs 56,000 crore in the first phase of the project, which is expected to be completed by January 2029, these sources said. The first phase of the plant will be spread across approximately 2,200 acres, with a township planned across a stretch of an additional 440 acres.

AM/NS is yet to disclose its investment plans, or the total planned capacity of this plant.

The second phase of the plant will entail an investment of around Rs 80,000 crore to add a capacity of 10.5 million tonne, will be spread across 3,800 acre, and is likely to be completed by 2033, the sources said.

About 20,000 jobs are expected to be generated in the first phase of steel plant, and an additional 35,000 in the second phase of the project, they said.

Apart from the steel plant, AM/NS India is also proposing to set up a captive port for vessels, material handling systems and back up areas. The company will spend around Rs 11,000 crore across both phases on this, with capital expenditure for the first phase likely at Rs 5,816 crore.

The company, which currently has a crude steel capacity of 9 million tonnes at its plant in Hazira in Gujarat, is expanding capacity at this plant to 15 million tonne. It is also planning to set up an integrated steel plant in Odisha.

The National Steel Policy 2017 envisages India’s steel production at 300 million tonne by 2030, and most large steel-makers are working on expanding their production. JSW Steel, which is the country’s largest steel-maker, is aiming for a production capacity of 50 million tonne by that period, while Tata Steel is targeting an output of 40 million tonne.