The cement sector in Assam today got a Rs 450-crore investment with Birla Corporation Limited signing a memorandum of understanding (MoU) with Assam Mineral Development Corporation for setting up a 1 million tonne cement plant.
The plant — to be located in the Umrangsu area of North Cachar Hills — will be commissioned in 27 months. It will produce 3,200 metric tonnes of cement or about 64,000 bags per day.
“These are signal investments from outside which show that Assam is a safe place and can also absorb the investment,” principal secretary, mines and minerals department, Ravi Capoor, said today at the MoU signing ceremony.
The MoU was signed by B.R. Nahar, chief executive officer of Birla Corporation, and J.P. Baruah, managing director, Assam Mineral Development Corporation, in the presence of Assam chief minister Tarun Gogoi.
Capoor said the company was selected through an open bidding system by advertising the matter in various media. Twenty-three companies had submitted their offers and Birla Corporation was selected. In the first phase, Jaiprakash Associates Limited was selected and in the second phase, Birla Corporation was selected.
Chief minister Tarun Gogoi said the day is a milestone in industrialisation of Assam. “This gives a positive signal to the investors and the misconceptions on security problems have been cleared,” Gogoi said.
Chairman of Birla Corporation Limited H.V. Lodha said Assam has the capability to compete and was a good option for investment. “This will give confidence to others in investing in Assam,” he said.
Lodha said the region offers a huge potential for cement players and the present capacity of the plant would be increased.
The corporation has offered 12.5 per cent free equity to Assam Mineral Development Corporation and also a facilitation fee of Rs 100 per tonne of limestone extracted.
The mining lease will remain with the AMDC and will not be transferred to Birla Corporation Limited, which will have to acquire land on its own.
The company today deposited one per cent of the equity base as earnest money, which is Rs 1.5 crore. The earnest money shall stand forfeited and MoU will be cancelled if the project is not commissioned within the time specified and will be liable for cancellation if the project remains non-functional for a period of 24 months after commissioning.
During the functioning of the project the interests of the AMDC as well as the state government will be protected by two directors nominated to the board of directors of the joint venture promoted company by the AMDC.
An AMDC official said once the project was implemented and the flow of revenue starts, the corporation would be use it for increasing its activities for locating mineral deposits and their utilisation.
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