POSCO- India joins RVNL to create vital infrastructure for steel sector
Company guarantees 6.48MTPA traffic in 1st phase
Sum total raw material transportation to escalate up to 30 MTPA in 3rd phase
10% Equity & 27.5 crore investment in the SPV - Haridaspur-Paradeep Rail route
Bhubaneshwar, Wednesday, October 11, 2006: In an unprecedented move POSCO-India, Indian subsidiary of POSCO, the third largest steel manufacturer in the world, today signed a Shareholders agreement with India’s Rail Vikas Nigam Limited (RVNL) to participate in a Special Purpose Vehicle (SPV) for Haridaspur-Paradeep Railway Line in Orissa. The company has acquired 10% equity stake with an investment of Rs. 27.5 crore and will have one Director on the Board. The railway project envisages a total capital expenditure of Rs. 598 Crore.
This infrastructure is not only going to help our project but also prove crucial for the entire steel sector in the state. This will help to secure stable and competitive railway transportation route for iron ores between the mines and the plants. This new rail link will reduce the distance by almost 41 km from the existing Haridaspur-Cuttack-Paradeep line allowing faster access to the plant. The company guarantees 6.48MPTA traffic in the first phase increasing the viability of this venture.
A 12 MPTA capacity integrated steel plant requires diverse raw materials like iron ore, coal, limestone and various auxiliary materials. Accordingly the estimated tonnage of raw materials, product and slag to be handled by rail transportation is about 9 MPTA, 19 MPTA and 30 MTPA respectively for the three consecutive phases.
Speaking on the occasion, Mr. Soung-Sik-Cho, CMD, POSCO-India said that “Participation in the SPV is yet another step towards our commitment to support the steel sector on a long term perspective. We are very happy being a part in the emergence of Orissa as the steel hub of the world in the coming days.”
RVNL is leading a consortium of nine companies to build an 82 km broad gauge new rail link between Paradeep port and Haridaspur, which is a virtual extension of the iron ore belts of Bansapani – Tomka where POSCO-India’s captive mines are going to be located. The Special Purpose of Vehicle (SPV) has been formulated by RVNL to operate the rail line by Public-Private partnership method on BOT basis for an agreed concession period.
POSCO-India Private Limited is a subsidiary of POSCO, the world’s No. 3 steel producer and one of the most competitive steel companies. POSCO signed a Memorandum of Understanding (MoU) with the Government of Orissa in June 2005, to set up a 12-mtpa green field steel plant near Paradip, Jagatsinghpur District, Orissa, with an estimated investment of 12 billion USD. The company will build a 4 million tons capacity steel plant in Orissa, during the first phase of its project between 2007 and 2010 and expand the final production volume to 12 million tons. POSCO-India Pvt. Ltd. was incorporated in 25th August 2005 with the Registrar of Companies, Orissa, under the Companies Act 1956.