Golden Quadrilateral 'lands' in mess
Poineer

The ambitious Golden Quadrilateral (GQ) project of connecting four main metro cities with four-lane highways, which had to be completed by December 2003, has run into serious delays because of land acquisition problems. According to the latest status report of the Ministry of Shipping, Road Transport and Highways, 138.14 hectares of land has still not been acquired for the GQ.

The National Highways Authority of India (NHAI), the prime implementing agency for highway work, has been unable to acquire land required for the GQ in eight States. Interestingly, it has to acquire the maximum land - 82 hectares in Tamil Nadu - the home State of Shipping, Road Transport and Highways Minister TR Baalu. Other States where land has still not been acquired include West Bengal (27 hectares), Andhra Pradesh (14.10 hectares), Karnataka (7.71 hectares), Maharashtra (3.01 hectares), Gujarat (2.32 hectares), Jharkhand (1 hectare) and Uttar Pradesh (1 hectare).

According to rules, the NHAI has to acquire land for all highway projects and then hand it over to the contractor for road work. If the NHAI is unable to acquire land, it cannot blame the contractor for delay in construction work. Thus, the prime responsibility is of the NHAI to avoid such delays and resultant cost overruns. The main problem being faced in land acquisition is amount demanded for transfer of Government land. Sources said the State Governments have been fixing very high rates of compensation. Bihar, for instance, awards compensation as high as 1.5 times the circle rate.

While States like West Bengal award solatium of 30 per cent and 12 per cent interest, Punjab awards exorbitant compensation without giving any consideration to type of land. The NHAI is now desperately trying to work out a mechanism to expedite land acquisition. Earlier acquisition notifications were vetted by the Law Ministry, but now the procedure has been simplified.

Twenty-five stretches measuring about 196 km of the GQ are still incomplete. What had to be completed in December 2003 would now be completed only by December 2009. The maximum length of incomplete GQ stretches are in Orissa, followed by Karnataka and Uttar Pradesh.

Even after revision of successive missed deadlines, the Ministry had expected to complete all work on GQ by 2007 end. The Ministry had later promised that the pending work would be completed in the first quarter of 2008-09. However, even this seems impossible as several contracts are not awarded and the work is likely to spill over to 2009.

In a reply in the Rajya Sabha, Minister of State KH Muniyappa admitted in as many words that: "The GQ project is likely to be substantially completed by December 2008."

Steel firms grapple with fresh input cost rise
Business Standard

Steel companies such as the Steel Authority of India (SAIL) and Tata Steel are grappling with a fresh rise in input costs. The price of imported coking coal, a key input, has doubled within a month’s span. “The spot price of coking coal is at $580-$600 a tonne levels compared with $270 a tonne in mid-February,” points out analysts at domestic brokerage houses. Indian steel companies largely import coking coal on a spot basis, especially from Australia. The fresh rise in coking coal prices is attributed to port congestion at Australia coupled with a reduction in output levels in other key producing countries like South Africa.

Analysts, however, feel coking coal prices will ease soon. Domestic steel companies typically raise product prices in the first week of every month and any change is expected only in April. In the first week of this month, domestic steel companies had hiked prices by Rs 1,500-3,500 a tonne despite strong opposition from the central government. Steel companies, while hiking product prices in March, attributed the increase to higher input costs, like coking coal and energy prices. The hike had resulted in prices of domestic hot rolled coil (HRC) steel reaching more than Rs 33,000 a tonne. Steel companies convert coking coal to coal, which is then used along with other inputs to make steel grade products. Meanwhile, Usha Martin, a speciality steel maker, is raising steel product prices by more than Rs 7,000 a tonne from April 1, according to Somnath Guha, chief operating officer of the company’s steel unit.

“We have to raise prices to protect our margins as raw material prices have been moving up strongly,” Guha said. Prices of key raw materials, such as metallurgical coke, iron ore, and pig iron, have been on an upward course on global supply tightness. The company had raised prices on February 1. Other alloy and speciality steel makers, including Mukand, ISMT, and Sunflag Iron & Steel, are also planning to up steel prices from April 1. Foundry industry affected, too. Indian Foundry Association (IFA) on Wednesday said the foundry industry across the country had been severely hit by rise in raw material prices over the last two years.

IFA Chairman Pawan Sureka said that since March 2006, prices of pig iron, the main raw material, had increased from Rs 12,500 a tonne to Rs 24,900 a tonne. He said unless the government stepped in to check the price rise of pig iron, most of the foundry owners would have to close shops. The government should restrict export of pig iron to check domestic price rise, he added.

The foundry industry was not able to pass on increased raw material prices to the consumers, which were mainly in the government sector, he said.

Sureka said that while the pig iron producers contributed the price rise to higher input costs of iron ore and coke, there was no parity between the actual rise in pig iron prices to input cost hike.
IFA urged the pig iron manufacturers to keep their prices unchanged for a period of three months.