Brahmani Steels did not deliver on big promises

KADAPA: The muchtouted Brahmani Steels in Kadapa district, owned by former Karnataka minister Gali Janardhan Reddy, had been in limbo much before he was arrested by CBI on Wednesday. His Obulapuram Mining Company had promoted steel plant, promising to make it next big thing after Vizag Steel Plant in the state.Brahmani Steels was to have an initial production capacity of 2 million metric tonnes per annum, increasing in a phased manner. The government of Andhra Pradesh led by then chief minister Y S Rajasekhara Reddy had allotted 10,670 acres of land in Ambavaram village, located between Muddanuru and Jammalamadugu, to the company at the rate of Rs18,500 per acre with the precondition that ore from the captive mines at Obulapuram village in Anantapur district would be utilized for steel production by Brahmani Steels. Another 4,000 acres were sold to the steel company in December 2007 to build an airport, a pilot training centre, and an aircraft servicing centre.
Rajasekhara Reddy laid foundation stone for the project on June 10, 2007. At that time, the Brahmani Steels management said Rs 4,500 crore would be spent on setting up phase one of the plant with a production capacity of 2 million tonnes per annum. The project was to be completed in 1618 months. It was also announced that another Rs 4,500 cr would be spent on second unit with a production capacity of 2 million tonnes and both units would be operational by 2010. The promoters promised direct employment for 10,000 people and indirect employment for another one lakh.When work was stalled in January 2010, company had spent only Rs1,350 cr for construction of compound wall, office buildings etc. Six months ago, government had sought an explanation from Brahmani management why the project had not been completed within stipulated time. Company sources say work was stalled for want of water, as allocated 2 tmc ft of water from the Gandikota project had not reached them. Meanwhile, it was reported that the company had mortgaged the plant for a Rs 350 crore bank loan and minister D L Ravindra Reddy told media at that time that government will issue notices to the company.