For the building of highways, the Modi government has permitted the usage of steel developed by secondary steel makers. Earlier, in highway building, road developers had been necessary to use steel developed by the principal steel producers only. The choice has been taken in the wake of increasing costs of steel supplied by principal steelmakers, according to a PTI report. Union Minister Gadkari has been vocal about this as important steel firms had been on a spree of value hiking for the final couple of months, mostly taking cues from their international peers. While the Road Transport and Highways Minister took the matter to PM Modi, in search of his intervention, steel corporations justified the value hike to increasing costs of iron ore.
The minister’s issues had been partly addressed in the Union Budget for 2021-22, in which import of steel was produced a lot easier by lowering customs duty on a variety of things and granting duty exemption on import of steel scrap, utilized by secondary steelmakers. As per India Ratings, domestic hot rolled coil (HRC) costs (Mumbai 2.5 mm-8 mm) inched up 45 per cent year-on-year and 3 per cent month-on-month to Rs 57,000 per tonne in mid-January 2021. In 2019-20, 103 million tonne of completed steel was developed by India, out of which about 45 per cent was manufactured by the secondary steel producers.
Other than reining in the integrated steelmakers from additional jacking up costs, the most up-to-date move will also widen the sourcing scope as effectively as provide a cushion to the secondary steel producers who had been hit difficult by the COVID-19 pandemic. According to the Ministry for Road Transport and Highways, with this move, the supplier base for steel utilized in national highways’ building would boost, top to more competitors as effectively as superior value discovery by the markets. This is also element of the ministry’s continuous work to decrease charges via the use of new technologies, decreasing restrictions on suppliers as effectively as generating the procurement program transparent.
Considering the boost in steel costs, which can influence the expense of constructing NHs, earlier Gadkari had recommended the will need to re-look at all circumstances which could be restrictive, devoid of impacting the material high-quality employed for the building of highways. The ministry has stated that all-steel regardless of whether developed from ore, pellets, billets or scrap melting– would be permitted for the building of national highways, as extended as it meets the requirements necessary for certain grades of steel.