February 1, 2021 4:21:46 am
In what could be a jolt to major steel makers of India, the Centre is set to allow steel made from recycled scrap to be used in construction of roads and bridges, liberating the sector from the compulsion of having to use steel made only by the top few iron and steel companies in the country.
Sources said the move comes against the backdrop of recent deliberations in the Ministry of Road Transport and Highways chaired by minister Nitin Gadkari, wherein it has been discussed that the steel industry in general and the top few premium steel makers in India in particular have hiked the price of steel by at least 50 per cent in the past six months.
The move is expected to give a clear cost-advantage to the Centre’s various road projects apart from making thousands of suppliers of recycled steel and smaller players in the sector eligible to vie for the business so long as their steel meets the required technical standard set by the ministry for roads and bridges.
“It was decided that as long as the steel from recycled scrap and such sources meets the BIS standard, there should be no problem in using them in the projects,” said a senior official. There will also be a requirement to set a stringent inspection regime for quality control at the ground level, officials said.
About 40 per cent of the expenditure in road projects goes into procuring steel and cement. Ministry sources said an estimated 10,000 suppliers in India will potentially be eligible to bid for contracts to supply steel after the move, introducing competition and also enhancing the size of the sector.
Over 60 per cent of the domestic steel demand is generated from construction sectors like real estate and roads.
The road sector the world over has been toying with a number of alternative technologies and materials that can replace steel. Composite and reinforced fibre bars claim tensile strength five to six times that of steel.
Gadkari, who had been criticising the increase in steel prices for the past two months, recently publicly warned steel makers about its impact on road projects.
A steel industry body last month wrote to Prime Minister Narendra Modi, defending the hike in prices and citing reasons behind it. Citing the pandemic, the industry body wrote that a global shortage of steel had triggered the rise in prices and that the price of iron ore had also soared.
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