The Andhra Pradesh government on Tuesday decided to select Essar Steel Limited as the joint venture partner for setting up a three million tonne per annum capacity steel plant in Kadapa district.
The state Cabinet cancelled its previous resolution, made on February 23, selecting Liberty Steel India Limited as the JV partner for construction and development of the YSR Steel Plant.
With Liberty stuck in financial woes, the SBICAP asked the YSR Steel Corporation Limited, the Special Purpose Vehicle of the state government, that its earlier recommendation be reviewed and proceed with the next qualifying applicant Essar.
The Cabinet considered the proposal and accepted SBICAP's recommendation to select Essar as the JV partner, according to Information Minister Perni Venkataramaiah (Nani).
The project capex of the project is Rs 11,606 crore.
The AP government established the YSR Steel Corporation Limited for development and operation of a new steel plant in Kadapa district and invited proposals in November last from renowned companies for inducting as a joint venture partner.
The proposed steel plant will have a capacity of up to three million tonnes per annum for producing high grade steel products.
The state government already signed a memorandum of understanding with NMDC for supplying the required 4.5 million tonnes of iron ore every year for the proposed steel plant.
According to the government claim, the plant would provide direct and indirect employment to about 25,000 people.
The state government pooled 3,148.68 acres of land spread over two villages for the integrated steel plant, which would now be alienated to the YSR Steel Corporation for Rs 1.65 lakh an acre.