SAIL-BSP: Milestone project in Indo-Russia relations still stands tall

5 June 2017

Even as India and Russia celebrate 70 years of diplomatic relations, the first project that was taken up under the contract between both the countries still stands tall.

Bhilai Steel Plant (BSP), the highest profit-making entity of state-run Steel Authority of India Limited (SAIL), was set up with Russian technology. The project, which was commissioned in 1959, was, in fact, the beginning of an adventure in foreign relations, in economic and industrial cooperation besides technological collaboration and commercial association.

The Bhilai agreement spread into a variety of productive activities, the more important of which was in the iron and steel industry—the bedrock of economic development. A decade after the birth of Bhilai, Indo-Russia collaboration gave shape to a series of steel plants in Bokaro and Visakhapatnam.

The first project of Indo-Soviet (now Russia) ties has been a resounding success in the nearly 60 years of its operations due to many factors, above all technical and financial collaboration from the Soviet. The BSP continues to be the flagship entity of the India’s largest steel producer and is the only unit of the SAIL with sound financial position.

According to the financial results released by SAIL for 2016-17, BSP recorded a profit (before interest, exceptional items and tax) of Rs 546.87 crore while all other plants barring Bokaro incurred losses. Interestingly, Bokaro, which registered a profit (before interest, exceptional items and tax) of Rs 251.85 crore,  was also set up by Russian technology.

Both the plants, of which BSP contributes lion’s share, had helped SAIL narrow its net loss. In the last financial year, BSP was the only unit of SAIL that was in profit. The plant registered a profit of Rs 803.09 crore when SAIL recorded a loss of Rs 4707.05 crore with all other units running under losses.

BSP, which is the sole supplier of the world’s longest 130-meter rail to Indian Railways and rail welded rail panels up to 260 meters length, has taken up expansion and a modernization plan. The project on completion will enhance BSP’s steel-making capacity to 7 million tonnes per annum. Interestingly, even after nine years, the expansion project could not be completed while the entire plant was set up within three years in 1950s.

Source – business-standard