The ministries of coal, mines and rural development have opposed setting up of Ultra Mega Steel Plants (UMSPs) in the country, saying that land and raw materials were scarce resources and cannot be dedicated exclusively for such units. In a proposal, the steel ministry had said that setting up of UMSPs were imperative to bridge the widening demand-supply gap of the metal, which is leading to rise in its imports. It had proposed for setting up of a Steel Finance Corporation as a special purpose vehicle (SPV) on the lines of Power Finance Corporation to help set up mega steel plants on a fast-track basis in the next few years. According to the proposal, the SFC would have an initial corpus of Rs 1,500 crore and it would be conferred the status of a non-banking finance corporation. Each state would have a SPV for an UMSP and would part-finance setting up of such a plant, it said. According to the ministry’s proposal, each UMSP will come with a yearly capacity of at least 10 million tonne (MT) in Orissa, Jharkhand, Maharashtra and Chhattisgarh. However, commenting of the proposal, the land resources department of the rural development ministry contended that since land is a limited source, its optimum utilisation is of paramount importance. “The suggestion of mimimum capacity for a steel plant is good as it would lead to lesser requirement of land in comparison to various plants of smaller capacity,” the ministry said while airing its views. The coal ministry too discouraged setting up of UMSPs with one of its top officials writing to the steel ministry that given the paucity in the overall availability of coal, it would not be possible to consider grant of special status to these plants for priority allocation of linkages as has been demanded by the steel ministry. The mines ministry, while shooting down the steel ministry’s demand for granting captive iron ore mines for UMSPs, said that assured supply of iron ore can happen through a separate linkage policy. Instead it has made out a strong case for setting up Ultra Mega Mining Projects. Objections * The steel ministry has said that setting up of UMSPs are needed to bridge the widening demand-supply gap of steel * Coal, mines and rural development ministries have opposed, saying that land and raw materials are scarce and can’t be dedicated exclusively for such units