IDBI wants to change Mideast Steel promoters

Oct 03: The Industrial Development Bank of India (IDBI) is keen on the revival of Mesco's Mideast Integrated Steel Ltd (MISL) project at D...

Oct 03: The Industrial Development Bank of India (IDBI) is keen on the revival of Mesco’s Mideast Integrated Steel Ltd (MISL) project at Dubri in Orissa. “IDBI is willing to bring in the required fund for the revival of the project provided the promoters and management of the company are changed,” IDBI chairman GP Gupta said.

"We are not able to take any decision as the promoters of MISL are not available," he said and added, "once the promoters are available we will talk with them and also with the Orissa government for the revival of the project."

MISL, which is putting up a pig iron plant, is on the verge of closure because of financial crisis and the promoters’ involvement in legal complications. Its chairman JK Singh and the managing director Rita Singh are in judicial custody for their alleged involvement in a case of forgery.

NINL revival: The prospect of revival of the jinxed steel project promoted by Nilachal Ispat Nigam Ltd (NINL) in Orissa, also looks bright with strong assurances coming to this effect from Gupta. "We are in talks with the Orissa government as well as the MMTC (Minerals & Metals Trading Corporation) for appointment of a professional as managing director for the NINL," he said.

According to him, the new managing director will be appointed within a month’s time. The post of managing director has been lying vacant since the death of Subrato Ray. Stating that the management of the NINL and its subsidiary Konark Mecoke is to be strengthened, the IDBI CMD said, "The projects are viable and we will see that they are revived."

IDBI is the merchant banker for the two projects. NINL, a joint venture of Central-sector MMTC and the Orissa government-owned Industrial Promotion and Investment Corporation Ltd (Ipicol), is setting up a one million tonne steel plant with an investment of Rs 1510 crore. NINL has already installed a second-hand blast furnace bought from Italy and the work is almost completed. Its subsidiary is setting up a facility for metallurgical coke with an investment of Rs 480 crore. However, the two projects are facing problems of finances and mismanagement.

The IDBI CMD said his bank had disbursed about Rs 17,000 crore of the sanctioned amount of Rs 28,000 crore in 1999-2000. He said most of the exposure was in the infrastructure sector like power, telecom, road and ports.

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However, he said, IDBI has shifted its focus to information technology and biotechnology from infrastructure. He said IDBI along with Sidbi and the Department of Electronics has set up a Rs 150-crore venture capital for the IT sector. He said IDBI is eager to support Orissa in setting up another IT park.

The IDBI CMD also said the bank will support the Dhamra Port Project and also the aluminium projects that are coming up in Orissa.