SAIL is all set to sign a definitive agreement to supply steel worth nearly Rs 15,000 crore to help Tehran set up a railway network project. State-owned State Trading Corporation (STC) to work out agreement for Rs.15,000 Cr deal
With the Western nations easing sanctions on Iran, the country’s biggest steel maker SAIL is all set to sign a definitive agreement to supply steel worth nearly Rs 15,000 crore to help Tehran set up a railway network project spanning over 15,000 km to connect its major ports and key production centres.
Khaleel Rahim, chairman of state-owned trading firm State Trading Corporation (STC) is slated to visit Tehran this week to finalise some of the formalities that could pave the way for steel exports from India.
Iran had sought Indian investment in massively expanding its railway network and needs about 3 million tonnes of steel rails to connect all major cities, industrial centres and also ports for faster evacuation of goods.
Last year, Washington had eased sanctions on Iran, which has enabled Indian companies to explore investment options. The commerce ministry officials had in December last year, met the top brass of SAIL, BHEL and railway infrastructure builder IRCON to consider investing in the west Asian nation.
A top commerce ministry official told that the STC has been entrusted with inking definitive agreements with its Iranian counterpart to pave the way for Indian steel exports there.
“Iran is seeking around 3 MT of steel and STC chairman Khaleel Rahim would visit Tehran this week to finalise the formalities,” the official said. Other companies like Jindal, Vizag Steel and Essar are also in the race, a source said.
When contacted, SAIL chairman C S Verma said after several rounds of discussions with the commerce ministry and STC, SAIL has expressed its readiness in supplying 3 MT rail steel. “We are supplying rails to Indian Railways since many years. Our director commercial Vinod Kumar would accompany Khaleel Rahim to help him finalise the modalities,” Verma said.
SAIL’s Bhilai steel plant is the sole supplier of the country’s longest rail tracks of 260 metres. With an annual production capacity of 3.15 MT of saleable steel, the plant also specialises in other products such as wire rods and merchant products.
The commerce ministry official said Indian exporters are banking on the UCO Bank to help implement the rupee payment mechanism. The easing of the payment mechanism has helped propel Indian exports to Iran to over $ 550 million, which, is around eight times the exports few years ago.
UCO Bank, in 2012, began handling payments for India-Iran trade, under which domestic oil refiners buy oil