Orissa confident on investments amid crisis

Financial Express, Oct 20, 2008

Even though the Vedanta Resources decided to go slow on its Vedanta Alumina expansion plans, and Jindal Stainless Ltd postponed its Rs 3,000 crore expansion programme, the Orissa government is confident that the global financial crisis will not affect the investments proposals of the state.

“The impact will not be felt in Orissa,” said IPICOL managing director Ashok Meena, while talking to media persons on the sidelines of ‘Enterprise Orissa 2008’, organised by the Confederation of Indian Industries (CII).

According to Meena, most of the MoU companies in the state have achieved financial closure, so their investment plans would not be affected.

He, however, said the promoters who have not achieved financial closure may differ their projects. He also said that few investors may go slow on their second phase expansion plans.

Vedanta Aluiminium, the London-listed Vedanta Resources group company, has recently announced to invest Rs 7,000 crore to ramp up its Lanjigarh alumina refinery plant’s capacity to 6 million tonne from 1 million tonne.

The first phase of the Lanjigarh refinery project in Orissa’s Kalahandi district has been completed and put into test run with bauxite sourcing from Balco. Project officials have been instructed to go slow on the expansion project, said a senior official of the Vedanta Aluminium at Bhubaneswar.

Jindal Stainess Ltd, which is setting up a 0.8 million tonne integrated stainless steel making facilities with an investment of Rs 2,500 crore at Kalinganagar Industrial Complex in Dubri of Jajpur district, had announced a plan to double its capacity through the second phase expansion programme of Rs 3,000 crore. The company has postponed the expansion programme, said a company insider.

Utkal Chamber of Commerce and Industries (UCCI) president, Niranjan Mohanty, is very confident that the projects will come up despite the global recessions. “All the mega projects, those have long-term plans, will certainly go ahead with their projects”, he said adding,”only the small investors may withhold their investments plans looking at the present market situation.”

The CII, Orissa chapter, president, Santos Kumar Mohapatra, is also not apprehending that the global financial crisis will have its bearing on the investments in the state. “The investments programmes may be delayed, but it would hit the projects”, he added.

“We are vigorously pursuing both the Orissa and Jharkhand project,” said Arcelor Mittal chief executive officer, greenfield projects in India, Sanak Mishra, when asked if the company is planning to go slow on the project in view of the crisis in the financial market.

Orissa has lined up investments to the tune of Rs 6 lakh crore by signing as many as 66 MoUs in sectors like steel, aluminium, power, cement, IT, port during the last eight years.

The MoU companies are putting up 46 steel projects, three aluminium projects, three cement , and 13 power projects besides several IT and other projects.

Meanwhile, 25 MoU companies, mostly steel, have started their project work and some of them have gone into partial productions.

Orissa, which had lined up investments to the tune of over 1 lakh crore in steel sector during the 1990s, witnessed the disappearance of the investments when the steel market took a down turn in the late 1990s.