India's third largest private steel producer, JSW Steel, has announced a cut of nearly 35 percent in its proposed investment of the Rupees 350 billion ($7.14 billion) integrated steel unit in West Bengal by the end of current fiscal year, due to pressure on liquidity.
"The total cost of the first phase of the project now stands at Rupees 40 billion ($814 million), of which Rupees 27 billion ($550 million) will be in debt form," said JSW Group CFO Seshagiri Rao. Accordingly, the initial first phase cost of Rupees 100 to 120 billion ($2-2.5 billion) has been cut by 60 percent.
According to the previous plan announced in November 2008, JSW Steel was to set up a 10 million mt steel plant in three phases, expected to be commissioned by 2020. The company owns 89 percent of the equity in the Bengal unit, while the remainder is state-owned.
Apart from setting up a plant in West Bengal, JSW Steel plans to build a greenfield steel plant in Jharkhand and to increase the Vijaynagar plant's annual capacity to 10 million mt from the present 7 million mt.