BHEL may not join RINL, MECON for Rs 2000cr steel unit

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26 Aug, 2025 12:21

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Power equipment maker BHEL may not join hands with steel maker RINL and MECON for the proposed Rs 2,000-crore joint venture that plans to set up a factory at Vizag for manufacturing steel for core sectors.

Sources in the know said BHEL has expressed its unwillingness to be a party in the venture at a meeting with steel secretary D R S Chaudhary last week.

"BHEL is not keen on setting up any such manufacturing unit as it already has factories for manufacturing equipment for power, auto and rail sectors at Trichy, Ranipet, Haridwar, Hyderabad, Bangalore and Bhopal," a source said.

"It (BHEL) does not find the proposition viable at this point in time," the source added.

MECON is a state-run engineering and consultancy firm offering full range of services required for setting up of a core sector project from concept to commissioning, including turnkey execution.

State-owned steel maker Rashtriya Ispat Nigam (RINL) was mulling forming a joint venture with BHEL and MECON for putting up a high-end seamless tube mill at Vishakhapatnam in Andhra Pradesh, entailing an investment of Rs 2,000 crore.

The facility was proposed to have four lakh tonnes per annum seamless tube installed production capacity. High-end seamless tubes find application in energy, oil and gas and water sectors among others.

The current crude steel production capacity of the country stands at about 72 million tonnes per annum. The government plans to enhance the output to about 140 million tonnes per annum by the end of the current five year plan (2012-17).

"At current rate of 5% import duty, there is a threat of India becoming a dumping ground for Chinese manufacturers but the safeguard duty should get imposed only as a short-term measure," said N C Mathur, President of industry body, Indian Stainless Steel Development Authority (ISSDA).

He further said that long term solution would depend on government taking proactive measures on increasing the usage of stainless steel in various infrastructure and consumer durables segments including rail, automotive and white goods.

Among the domestic producers, Jindal Stainless, with a capacity of 1.8 MTPA, accounts for about 50% of total domestic production. Other major players include Salem Plant of SAIL, Viraj Steel and Mukand Ltd, while rest of the companies have smaller production units.