INFRASTRUCTURAL CHALLENGES FOR THE INDIAN STEEL INDUSTRY

Subrat Kumar Sahoo Ispat Industries Limited

September 2010

INDEX
ABSTRACT STRUCTURE OF THE INDIAN STEEL INDUSTY DEMAND & SUPPLY PRODUCTION

EXISTING CAPACITY AND FUTURE EXPANSION

COST COMPETITVNESS IN THE INDIAN STEEL INDUSTRY LOSSES FOR THE INDIAN STEEL INDUSTRY CURRENT PROJECTS INVESTMENT

September 2010

INDEX
INFRASTRUCTURAL & LOGISTICS CHALLENGES IN INDIA FOR EXISTING, BROWNFIELD AND GREENFIELD STEEL PROJECTS IN INDIA SWOT ANALYSIS
STRENGTHS WEAKNESSES OPPORTUNITIES THREATS

CHALLENGES OF LOGISTICS IN THE INDIAN STEEL INDUSTRY PERFORMANCE OF LOGISTICS CHALLENGES OF OCEAN LOGISTICS
MITIGATION PLAN FOR PORT LOGISTICS MITIGATION PLAN FOR ROAD LOGISTICS

CHALLENGES OF STEEL RAIL LOGISTICS CHALLENGES OF OCEAN LOGISTICS

MITIGATION PLAN OR ROAD LOGISTICS

ABSTRACT Logistics and supply chain management is the most challenging responsibility in the Indian Steel Industry. There has been tremendous pressure on the Industry vis-a-vis stringent competitive resources, performance, productivity, quality control and price reduction. The Steel sector requires 4MT of bulk cargo to produce 1MT steel output.

Structure of the Indian Steel Industry

India has emerged the 3rd largest exporter of iron ore, after Brazil and Australia. India stands among the top 10 countries producing steel in the world. However, its global trade only accounts for only 2% of the global steel trade. Our domestic steel industry reported rapid growth during the period between 2003-04 and 2007-08.
.

Availability of iron ore is a major challenge for the domestic steel industry. The total production of iron ore is 70%-72% as fines and 25%-30% as lumps / CLO.
STRUCTURE / MARKET SIZE The steel industry in India has been moving from strength to strength and, according to the Annual Report 2009-10 compiled by our Ministry of Steel, India has emerged as the fifth largest producer of steel in the world, and is likely to become the second largest producer of crude steel by 2015-16, more than doubling its capacity to 124 million tonnes.

Estimated Domestic Demand & Supply Balance 2011-12

Estimated Requirement of Raw Materials and Other Inputs by 2011-12
Input Materials Unit Estimated consumption 2005-06 31.5 15.0 Negligible Estimated consumption 2011-12 46.0 24.5 3.00 Additional requirement by 2011-12 14.5 9.5 3.00 Products Demand Million Tonne Million Tonne Million Tonne Million Tonne MCAL Million Tonne MW 66.9 10.2 11 4.0 10000 0.85 4120 130 18.0 19.5 7.4 15000 1.5 7700 63.1 7.8 8.5 3.4 5000 0.65 3580 Flat Total 41.3 70.3 41.3 77.4

Coking Coal

Million Tonne

Non-coking Coal Million Tonne Coal Dust Injection Iron Ore Scrap Steel Limestone Dolomite Natural Gas Ferro Alloys Power Million Tonne

In Million Tonnes
2011-12 Supply

Non-Flat

29

36.1

Production
Steel production rose by 4.2 per cent to reach 60 MT in 2009-2010, according to the Ministry of Steel. Moreover, according to the ministry, the crude steel production capacity in the country by 2011-12 will be nearly 124 MT. According to the Ministry of Steel, 222 memorandums of understanding (MoUs) have been signed with various states for a planned capacity of around 276 MT. Major investment is planned in the states of Orissa, Jharkhand, Chattisgarh, West Bengal, Karnataka, Gujarat and Maharashtra. According to the Annual Report 2009-10 of the Ministry of Steel, domestic crude steel production grew at a compounded annual growth rate of 8.6 per cent during 2004-05 and 2008-09.

Crude Steel Production

Year Crude steel production (in Mn. Mt) Quantity 2005-06 2006-07 46.46 50.81 Growth rate over last year (%) 6.96 9.38

2007-08
2008-09 2009-10*

53.86
58.44 64.88

5.98
8.50 11.02

Source: Joint Plant Committee (JPC); * =Provisional

Existing Steel Capacity & Future Expansion

(C rude s teel capacity in million tonne)

Inves tor

E xis ting C apac ity

B rownfield expans ion 2012

G reenfield 2012

S AIL R INL T ata S teel E s s ar S teel J S W S teel JS PL Is pat Indus tries B hus han P ower & S teel B hus han S teel O thers & S econdary Total
S ourc e: F inmin

12.84 2.90 6.80 4.60 6.60 2.40 3.60 1.20 0.80 31.00 72.74

8.56 3.40 3.20 3.90 4.40 4.80 0.60 1.60 2.20 3.20 35.86

3.00 * 6.00* 3.25

12.25

Total c apac ity likely by Dec ember 2012 21.40 6.30 13.00 * 14.50* 11.00 10.45 4.20 2.80 3.00 34.20 120.87

With additional capacity expansion, as shown above, surging imports from China are a matter of great concern for the Indian Steel Industry. Chinese imports may pose a major hurdle to Indian expansion projects, in addition to logistics and infrastructural challenges.

Cost Competitiveness of the Indian Steel Industry

The cost of major raw materials like iron ore and coking coal are lower in India than in other countries . Labour costs are low, but gains are somewhat neutralized by the low level of productivity. The financial cost and costs of power, oil and some other materials are high. Energy accounts for about 35%-40% of the cost of steel production in India whereas it accounts for about 28% in developed countries. All these make the pre-tax cost of steel making in India higher than that in South Korea, Australia, Mexico, and the CIS countries. India has a definite advantage of having low wage rates. The wage rates and other related costs accounts to 15% of the total cost of steel production, ie, almost half that of other countries , where they are 30% of the total cost.

Overall Loss for India in Q1 2010-11

Heads where Losses were Incurred Loss from Export of Iron Ore to China* Inventory Loss Sales Loss Total Gain / (Loss) Loss in million US$* 1037 316 105 1458

In the period Apr-Jun10 , the Indian Steel Industry reported a loss of US $ 1458 million (excluding erosion in market capitalisation). In July10, prices were further down by US $ 21.6 per MT ,eroding an additional million US $ 41.0 on sales volume of 1.8 MT of HRC. In the same period ,China gained million US$ 1047 on cheaper imports of iron ore from India.

*1 US$ = 46.23 INR

Loss for India on the Export of Iron Ore

Particulars
Import rate as on 01.05.10 US $ / MT Import rate as on 29.06.10 US $ / MT Fall in Price in US$/MT Export of Iron Ore by India to China (Million Tonne) Chinese steelmaker's/country's gain (Million US $)

China Import (63-63.5 Fe)

177 138 39 27 1047

Source : Metal Bulletin Research Weekly Raw Material Tracker

Note: US$ Rupee parity has been taken Average of Apr-Jun10 at 46.35

For the period Apr-Jun10 due to low price of Iron Ore China has gained million US$ 1047.

This is also the loss incurred by India.

*1 US$ = 46.23 INR

Current Expansion Projects

Bhushan Steel plans to invest US$ 5.72 billion in building 12 million tonne capacity in the states of West Bengal, Jharkhand and Orissa. Non-ferrous metals giant Vedanta Resources plans to invest around US$ 4.79 billion in a 5-million tonne steel plant in the Keonjhar district of Orissa, and envisages commissioning the same by 201213. Tata Steel is also planning to build a 5-million tonne plant in Chhattisgarh, with an investment of around US$ 3.59 billion. The steel major is setting up greenfield projects in Jharkhand, Orissa and Chhattisgarh. In Jharkhand, it is likely to invest about US$ 8.38 billion for a 12-million tonne integrated steel plant. In Orissa, it plans to put in almost US$ 4.39 billion for a 6-million tonne capacity plant. Mesco Steel plans to invest US$ 2.20 billion towards the expansion of two of its steel plants in Orissa.

Current expansion plan

Reliance Infrastructure, (part of the Reliance Anil Dhirubhai Ambani Group) plans to build a 12-million tonne steel plant in Jharkhand, which is likely to be completed by 2012. Indian Railways plans to invest around US$ 437.25 million per annum for stainless steel for the new alloy-made wagons and coaches it intends to add to its portfolio. Welspun Gujarat Stahl Rohren (one of the larger steel pipe makers in India), plans to increase the capacity of its pipe plant by 75%, to 1.75 million tonnes, with an investment of US $ 222.52 million. The JSW group plans an outlay of US$ 40 billion for steel and power projects. These projects will be completed by 2020. Visa Steel has lined up a US$ 1.51 billion-US$ 2.02 billion integrated steel project in Chhattisgarh.

SAIL, Bokaro

SAIL, Bokaro Adhunik Steel

Current Capacity Expansion

SAIL, Bhilai

Mittal, Jharkahn d Tata steel Jhknd

JSW JSPL SAIL, Burnpur Tata Steel, KPO SAIL, Durgapur

Tata steel, Jamshedp ur

Essar,Sur at ISPAT

ArcelorMittal Orissa
Tata Steel CSP Essar Manoharpu r POSCO

Visa Steel Bhushan Steel

Uttam Galva Bhushan Steel & Power

RINL Vizag SAIL, Rourkela

JVSL

JSW

Major steel plants (brown & green fields) in India would be clustered mostly around the red circle passing through three states rich in coal and iron ore, putting severe pressure on logistics infrastructure.

Investments
A host of steel companies have lined up major investment proposals. Furthermore, with an expanding consumer market, the Indian steel industry is likely to receive huge domestic and foreign investments. The domestic steel sector has attracted a staggering investment of about US $ 238 billion, according to the Minister of State for Steel, A. Sai Prathap. This consists of nearly 222 MoUs signed between the investors and various state governments, mostly in the states of Orissa, Jharkhand, Chhattisgarh and West Bengal. SAIL is planning to set up a 12-million tonne plant in Jharkhand. In December, Indias largest engineering conglomerate -- Larsen & Toubro (L&T) -- and state-owned Nuclear Power Corporation of India Limited (NPCIL) formed a US$ 373.2 million joint venture for specialised steel and forging products. Stainless steel manufacturer and exporter Varun Industries is setting up a US $ 171.8 million stainless steel-cum-alloy steel plant at Rohat, Jodhpur. Tata Steel has entered into a joint venture with Japans Nippon Steel for the production and sales of automotive cold-rolled flat products at Jamshedpur. This jv is expected to invest US $ 400 million to set up an automobile venture in India. Steel major JSW Steel has earmarked a capex of US $ 1.6 billion for 2010-11, and plans to increase thecapacity of its Bellary plant in Karnataka from 7 MT to 10 MT by the end of 2010-11.

SWOT ANALYSIS
Strengths
Abundant supply of iron ore Low cost and reasonable efficient labour force Strong man ower capability and improving productivity History in steel making and acquired skill Strongly globalised industry and emerging global competitiveness Increases in productivity through the adoption of more efficient and cleaner technologies in the manufacturing sector will be effective in merging economic, environmental, and social development objectives Strong steel production base and achieved productivity levels High degree of entrepreneurship Availability of investments and capital backup Support from government , which helped in growth of the steel industry The biggest boost to efficiency in the steel industry has come from the increased use of continuous casting an indicator of the modernity of the production process. Availability of a good railway network for domestic shipping

Weaknesses
Limited availability of coking coal High transportation and handling costs Mining costs are also high Implementing the latest technology has become a concern for the Indian steel industry The steel industry in India did not attain self sufficiency in constructing and efficiently maintaining steel plants. It still relies on countries like Russia, Ukraine and Kazakhstan, etc, for installing new steel plants in the country.

Although India has modernized its steel making considerably over the past decades, nearly 6% of its crude steel is still produced using the outdated open hearth process.
Quality is also one of the drawbacks India needs to address. Quality of flat steel or long steel is an issue for reaching international quality standards.

Weaknesses
Logistics is one of the constraints for Indias steel industrys competing in global markets. Our domestic steel industry has to concentrate on the supply of raw materials and meeting the customers delivery time. The loading and unloading rates at ports, container handling, and in plant logistics also hamper the global success of the Indian steel industry. A tonne of finished steel requires handling and transportation of around 4 tonnes of bulk material, so the anticipated expansion of steel capacity, even accounting for delays, would exert tremendous pressure on Indias logistics infrastructure post the commissioning of projects. The problem would get aggravated if future capacities show regional concentration, which is likely.

Opportunities
Huge increase in steel consumption will result in the tremendous growth of the steel industry in the coming years India has all the resources and capabilities to become a global supplier of quality steel Low steel prices make imports from Russia, Ukraine and Kazakhstan attractive. The geographical proximity of Japan, South Korea and China makes them important suppliers as well. With the decreased potential for steel in developed countries, India has opportunities for becoming the world leader in the production and supply of steel and iron ore Concurrently, industries like automobiles and urban infrastructure are also growing..

Threats
Infrastructure is a major problem for the steel industry in India. Insufficient infrastructure, in terms of transportation and logistics, is becoming a growing concern for the Indian steel industry. The government is also planning to increase its share in infrastructure as part of the GDP, from 2.5% currently. Huge competition in the global markets. In the Indian market, too, with the entry of foreign players, domestic steel producers are facing tough market competition. Increasing concern for global climate change is becoming a threat to the industry. Countries are focusing on the reduction in carbon emissions, particularly with respect to energy intense industries like steel, cement, etc. The steel industry accounts for between 5%-6% of total man-ade CO2 emissions. This is less than that accounted for by transport or power use by the general public, showing the steel industry is at the frontline in fighting global warming. Future energy use and carbon emissions depend on the level of production and the technologies employed. Moreover, different economic and policy settings affect structures and efficiencies within the sector. Issues with the dumping of low priced steel products from China and other countries is also another hurdle in the growth of the Indian steel industry. Infrastructure, with respect to steel plants and logistics of the steel industry, is also one of the key challenges for the Indian steel industries.

Challenges of Logistics in the Indian Steel Industry

High transportation costs: This is one of the major concerns as it is affecting the growth of the industry. Due to problems in infrastructure and, also on account of low levels of productivity in terms of handling and transporting cargo, the costs of transportation have risen daily.

Lack of connectivity to the ports, with sufficient rail and road networks, is also one of the causes for high transportation costs.
Proximity and access to raw materials. Infrastructure requires to be developed to transport raw materials for steel production, for achieving the production goal of 75 million tonnes of additional capacity by 2019-20. There will an additional movement of 300 million tonnes of raw material.

The efficiency of Indian ports is affected by shallow draught, low productivity, high costs, long vessel turnaround times, poor governance, and lengthy Customs delays. Shipping costs are consequently high a shipment from India to the United States can cost 20% more than it would cost from Thailand and 35% more than China.
Unlike international ports like Singapore and Rotterdam, the shortage of storage space in the major Indian ports has further compounded the problem of speedy cargo evacuation from port premises.

Steel Logistics Chain

Steel Plant
Raw Materials/ Supplies/ Sourcing
LP: is Logistics Provider
LPs Role is to Deliver right quantity at right time without damage in orderly manner

Integration of Steel Logistics Chain

Steel Plant

Customer/Processi ng Agencies/Hubs LP

LP

Road

Logistics Service Provider

Rail

Customer Second Leg

Ports

Typical Material Movement Plan at a Steel Capacity of 110 MTPA

State Iron Ore Cokong Coal Non Coking Thermal Coal(For Sponge Iron) Orissa Jharkhand Chattisgarh Others Total 34 38 25 90 186 11 17 9 31 69 11 3 6 20 39 9 8 6 22 46 12 13 9 31 66 Coal Others Total Raw Materials MTPA 77 79 55 193 405 21 21 15 53 110 Total Steel MTPA

Total raw material movement plan at 110 MTPA steel capacity will be 405MT besides the movement of 110MT of finished steel.

Performance of Logistics in the Indian Steel Industry

Outbound logistics costs: Due to problems like an inefficient maintenance of cargo, the outbound costs of logistics are increasing considerably. Outbound logistics costs include costs of idle freight, detention, in-plant logistics, transaction costs, handling and storage costs, lashing and bracing costs, etc. In-plant logistics: In-plant logistics includes activities such as real time location visibility levels, in-plant wagon turnaround, in-plant truck turnaround, despatch spread, transit inventory, the in-plant route network, number of handlings, etc. These are activities which are to be taken care of. The efficient operations of these activities will also reduce costs considerably.

Challenges of Ocean Logistics

There are 12 major ports, 200 minor and intermediate ports, with the cargo basket moving away from being bulk cargocentric. Minor ports marketshare increased from 9.9% in 1997 to 28.8% in 2007. Major sea ports accounting for traffic in steel and iron ore cargo are VPT Visakhapatnam,the ports of Chennai, Haldia, Paradip, Enore and others. At almost all the ports, iron ore loading is a mixture of mechanical loading systems which consist of conveyors, stack reclaimers and ship loaders, and a manual loading process using shore cranes and ships gears and grabs. The existing mechanical loading systems are becoming old and obsolete, and there is an immediate requirement for upgrading the infrastructure in the ports, particularly with respect to the loading and unloading of cargo. Only Vizag and Chennai ports can load alongside berths cape vessels upto 145,000-150,000 DWT, with draft of about 16.5 Mtr. In Goa, at Berth No. 9, cape-size vessels can load only upto 100,000 MT to reach 13.0 Mtr draft. Thereafter, top-up at anchorage by barges or transfer vessels is required.

No rail connectivity to ports like Belikeri, Karwar, Krishnapatnam. Thus movement by trucks is inevitable.
Poor infrastructure at ports leads to high throughput time, high turnaround time for ships, slower loading rates, delays due to break-downs, thus resulting in port congestions, higher incidence of demurrage costs and high costs. Higher costs erode competitive advantage vis--vis exporters from other countries.

India is unable to derive full benefit of geographical advantage to export markets due to poor infrastructure and high costs

Sea Ports India

Mitigation Plan for Challenges in Port Infrastructure

To augment the port capacities for gear up for higher exports of all commodities.
Modernization of all machinery and mechanization. To develop higher drafts to take advantage of handling vessels of higher capacity with lower unit freight costs.

To compress time lines in port projects implementation.

To match port capacities with rail-road infrastructure to remove bottlenecks. To develop facilities for railway rakes, to go inside the ports for unloading / loading and dispensing with interchange/exchange yards to reduce cycle time. Seamless movement in/out of port for both road and rail to cut down waiting time .

Challenges for Steel Rail Logistics

About 80% of the proposed steel plant capacities are planned in South Eastern, South East Central & East Coast railway zones. This would require huge investments in: Augmenting capacities of yards / stations /signalling/laying several additional tracks / rail bridges /tunnels etc. Adequate rolling stock. Acquiring additional land / forest & environmental clearances. Current fleet of 225,000 wagons can handle 750 million MT of traffic. Wagon building capacity is higher but due to shortage of wheels and axles the output is limited. With induction of 12,000 wagons per year , traffic handling capability will be 1,200 MT , if overall turn around time is achieved to be 4.5 days. Considering steel traffic to be 15% of total Indian rail traffic, 180 million MT of steel traffic can be handled. If similar growth in other commodities continues the capacity will be inadequate. Railway has decided to increase axel load (20.5t to 25t to 30t). It still needs to finalize rolling stock policy (type and design of wagons). The above would require 5 to 10 years and might affect the time schedule of the mega steel projects

Challenges of Rail Connectivity

International railway systems carry more than 100 wagons per rake with the Australian system carrying over 300 wagons per rake. Compared to this, a rake in India handles 58 BOX wagons as the length of the loops in the yards and stations in India is only 686 m, limiting the length of the trains. Even rakes of 58 wagons cannot be handled at sidings of some ports. The space envelope 82 in India does not permit the movement of double stack container wagons. Since stations, platforms, roofs and bridges had been constructed according to the previously designed space envelopes, the envelopes of existing railway lines cannot be increased, thereby limiting the carrying capacity of the rakes. Load carrying capacity expressed as the ratio of a loaded wagon to an empty one ranges from 4-7 internationally as against 2.5 in India. Some of the other challenges with rail connectivity are: Iron ore miners are forced to move out by road due to the lack of proper rail connectivity. Sharing railway lines for both passenger and goods is creating a problem, resulting in priority given to passengers and delays and congestions of good traffic. Low average speed of freight traffic leads to longer lead time and reduced throughput. Lower haulage capacity leading to higher lead time. Frequent changes in freight charges. Freight charges for iron ore are being targeted for frequent hikes, leading to increase in costs for rail compared to the road.

Railway Freight from Mines Head to Visakhapatnam Port in USD/MT

Period From To 2000 2001 2001 2002 2002 2003 01.04.2002 08.07.2002 09.07.2002 31.03.2003 2003 2004 2004 2005 01.04.04 28.10.04 29.10.04 26.11.04 27.11.04 31.03.05 2005 - 06 01.04.05 30.11.05 01.12.05 31.03.06 2006 - 07 01.04.06 30.06.06 01.07.06 31.10.06 01.11.06 31.03.07 2007 - 08 01.04.07 30.06.07 01.07.07 30.09.07 01.10.07 30.11.07 01.12.07 06.01.08 07.01.08 31.03.2008 2008-09 01.04.2008 14.04.2008 15.04.2008 21.05.2008 22.05.2008 30.06.2008 01.07.2008 30.09.2008 01.10.2008 12.11.2008 13.11.2008 31.03.2009 2009-10 01.04.2009 30.06.2009 01.07.2009 30.09.2009 01.10.2009 Total Freight 9.01 9.28 0.00 9.28 8.71 8.71 0.00 8.71 9.43 10.16 0.00 13.06 13.06 0.00 14.36 14.65 15.23 0.00 15.03 15.33 17.14 20.16 21.42 0.00 28.11 18.61 13.72 12.83 13.72 14.53 0.00 14.53 13.58 14.53

Mitigation Plan for Steel Rail Logistics

About 80% of the proposed steel plant capacities are planned in South Eastern, South East Central and East Coast railway zones
This requires huge investments in augmenting capacities of yards / stations /signalling /l aying several additional tracks / rail bridges /tunnels, etc Adequate rolling stock Acquiring additional land / forest & environmental clearances Current fleet of 225,000 wagons can handle 750 million MT of traffic Wagon building capacity is higher, but due to a shortage of wheels and axles , the output is limited. With the introduction of 12,000 wagons per year ,traffic handling capability will be 1,200 Mt if overall turnaround time is achieved at 4.5 days Considering steel traffic to be 15% of total Indian rail traffic, 180 million MT of steel traffic can be handled. If similar growth in other commodities continues , the capacity will be inadequate The Railways have decided to increase axel load (20.5Tto 25Tto 30T) , but need to finalize their rolling stock policy (type and design of wagons) The above would require 5 to 10 years ,and might affect the time schedule of the mega steel projects

Mitigation Plan for Steel Rail Logistics

To include transportation of Iron Ore in Liberalised Wagon Investment Scheme Policy
Under the Liberalised Wagon Investment Scheme (WIS), issued by the Indian Railway Board on 15.04.08, transportation of Coal and Coke, Ores and Minerals, including iron ore, has not been permitted. Thus, the policy does not give any advantage to the steel industry.

Few More Expectations from the Steel Industry

Railway sidings at major steel plants should be developed as assisted sidings with equal participation from the Railways For repairs and maintenance of wagons, carriage and wagon depots should be developed by the Railways at major steel plant sidings

Future developments of railway networks related to the steel industry should be given utmost importance in the annual Railway Budget
Separate guidelines with equal participation are required from the Railways for electrification/modifications of existing sidings having large volume of traffic

Challenges of Poor Road Connectivity

Width of highways is not sufficient for both passenger and goods transports to be transported in a proper fashion. Maintenance of highways is poor. Much of highway maintenance is underfunded. Lack of organized fleet owners, resulting in reduced quality and professionalism. Improper road connectivity, resulting in longer lead times. Reliability and cargo integrity with other modes of transportation are an issue.

Roadways - Network

East West Corridor

Golden Quadrilateral Project

North South Corridor Port Connectivity Projects

Indian Roads
National Hihways State Highways Major District Roads Rural and Other Roads Total Highways Length North South Corridor East West Corridor Total Corridor Length Golden Quadilateral Length

Length (Kms)
66,790 128,000 470,000 2,650,000 3,314,790 4,000 3,300 7,300 5,846

Source: -NAHAI

Roadways - Solutions
More Expressways and Highways should be constructed More Highways should be made four- and six-lane More Road Connectivity with remote areas for goods distribution Road Maintenance should be done regularly, especially for heavy traffic roads Use of an intelligent transport system, system of green channel, and rationalization of discretionary powers is required

Conclusion
Infrastructure will be a major challenge by 2020 at 180 MTPA of steel production.
Indian ports should immediately go for capacity enhancement as well as modernization of the existing system, including the development of deep draft for accommodating the capsize /super capsize vessels. Railway infrastructure will become a bottle neck. More PPP projects to be initiated to expedite pending projects. Latest technology to be deployed and implemented. Pipeline infrastructure to be the most common mode of transportation for Iron Ore fines and concentrates. Railway infrastructure shall be developed inline with the freight corridor from mines head to major ports to avoid congestion. Infrastructure is a major challenge for the Indian steel industries . We need to form an apex body for financing the infrastructure and ogistics required for the total movement of raw material and finished steel by the year 2020.