Indian conglomerate Essar alongwith its Bangladeshi partners have renewed their willingness to invest $500 million for setting up a steel plant in any location in the country where power supply can be ensured, said an official Tuesday.
The Indian steel producer owned by Ruia brothers sought the permission of Board of Investment (BOI) in August last year to set up the proposed plant preferably in Chittagong.
As the supply of gas in Chittagong was inadequate, the proposal was not approved. Since then, Essar entered into partnership with four local companies to build the steel plant.
"Essar has informed us that it is now ready to set up the plant in any other location if they are offered the minimum facilities," a senior official in the Board of Investment (BoI) told the FE on Tuesday.
He said this after the Indian giant and its partners recently requested the government to allow them to go ahead with their investment proposal.
The initial investment proposal of Essar requested the government to ensure supply of around 60 megawatt power if they are not given gas or coal for electricity generation for their own use.
"The Indian business-giant is now also willing to have electricity from the government instead of establishing their own power plant due to non-availability of gas and coal," a source close to Essar's local partner said.
He said "We will start the work if the government agrees to provide us power despite offering minimum facilities on tax and duty."
The source said Essar and its local partners-- S Alam Group, PHP, KYCR and Namrin--requested the government for allowing duty-free import of capital machinery and tax holiday considering its large volume of investment.
A reliable source said the company expects a positive reply from the government, as there is now presence of local partners in the investment.
"We told the BoI that we will buy gas and power at the market rate. We told them that we would work like any other investor. We don't want any special treatment," he said.
A BoI senior official, however, said it could not make any decision on Essar unless there is green signal from the Ministries concerned.
Essar Global Limited (EGL), founded over three decades ago, is a conglomerate with stakes in steel, energy, power, communication, shipping, logistics and construction.
EGL has a market value of over US $50 billion and employs 30,000 people worldwide, according to the information posted at the company's website. The company has recently made acquisitions of two steel plants in Canada and the United States.
The BoI official said the proposed plant will have a production capacity of 1.2 million tonnes of hot-rolled steel a year.
Of which, he said Essar and its partners would export 20-30 per cent while the remaining will be supplied to Bangladesh's local market.
The government has been considering some proposals from a number of business groups to develop a basic iron ore industry that will meet the growing demand for steel in the country, the BoI official said.
He said the country's leading players including S Alam Group, PHP, KDS and Abul Khair import hot roll steel for their re-rolling mills worth $150 yearly.
