by Wadsam | May 23, 2015 10:02 am
Led by the state-owned Steel Authority of India Ltd (SAIL), the Afghan Iron and Steel Consortium (AIFSCO) after years of apprehension about the project has pulled out from the project altogether.
According to The Financial Express, an inter-ministerial group at its latest meeting concluded to scrap the USD 10bn steel, power and mining project that was conceived in November 2011.
The Consortium had received three high-grade iron ore mines, which was meant to be the biggest foreign investment proposal by Indian firms. The Consortium had planned to carry out the project in phases including a 6.12mn ton steel plant, an 800 MW power facility, create infrastructure for mine development and necessary infrastructure at a cumulative investment of a USD 10.8bn over 11-15 years.
Following some militant attacks including the one on Indian consulate in Herat and SpiceJet plane at Kabul airport, the Consortium decided to cut down the investment plan by 75% to just USD 2.9bn.
The members of the Consortium started losing hope in the project after years of delay and security concerns.
“The company does not want to park up its funds in a far-flung project that is full of uncertainty and already much delayed,” the source quotes Rashtriya Ispat Nigam, one of the members.
In addition to security issues in Kabul, the Consortium also express concerns about the absence of road connectivity for import of plant and machinery and for evacuation of the finished products.
Some have linked the decision of the Consortium to President Ashraf Ghani’s pro-Pakistan foreign policy.
Besides SAIL, other members of the consortium include state-owned NMDC and RINL and private sector steel players — JSW, JSW Ispat, Jindal Steel and Power, and Monnet Ispat and Energy. SAIL has the maximum 20 per cent stake in the venture, while NMDC and RINL hold 18 per cent each. Private players JSW Steel and JSPL hold 16 per cent each, while JSW Ispat and Monnet have 8 per cent and 4 per cent stakes respectively.
Source URL: http://wadsam.com/afghan-business-news/sail-led-consortium-pulls-out-from-10-8bn-afghan-mining-project-322/
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