The Central Public Works Department (CPWD) under the Ministry of Housing & Urban Affairs (MoHUA) has withdrawn earlier guidelines issued in 2019 on procurement of reinforcement steel bars, or re-bars, for construction projects which allowed only the primary steel producers that use iron ore as basic raw material for steel production through the integrated BF-BoF route to supply steel for structures.
This effectively means that induction furnace (IF) steel-makers that use ferrous scrap to produce steel could also participate in government tenders for supply of steel for construction.
List of preferred suppliers
However, the CPWD notification states that, for the sake of ensuring quality, the notice inviting tender (NIT) to be issued by the authorities “may prescribe reputed brands like SAIL, RINL, Tata Steel, JSW and JSPL in the list of preferred makes”.
The contractor supplying the product needs to get the “manufacturer’s certificate stating the process of manufacture, chemical composition and test sheet results of each mechanical test applicable to the material” which will have to be re-tested at National Accreditation Board for Testing & Calibration Laboratories (NABL) or other government laboratories.
The CPWD’s revised guidelines come close on the heels of the Ministry of Road Transport & Highways (MoRTH) issuing fresh orders that re-bars or TMT bars (IS:1786) conforming to specified Indian standards (BIS) could be supplied by producers using iron ore as well as pellets, billets (IS:2830) and melting scrap.
SteelMint has reported earlier that the Road Transport Ministry had revised its previous mandate that secondary steel producers would have to procure billets from integrated producers for rolling into re-bars that could then be supplied for road and highway construction.
MoS clarification
This significant and long-awaited change in the government’s steel purchase policy was triggered by a Ministry of Steel (MoS) letter dated 12 Jan’21 that underlined that the CPWD and MoRTH’s earlier guidelines discriminated against secondary steel manufacturers.
The MoS had clarified that routes of production have no bearing on the quality of steel produced. Moreover, use of scrap/DRI instead of iron ore does in no way affect quality provided the products manufactured conform to BIS standards that have been made mandatory for most steel products through successive Steel Quality Control Orders issued by the MoS.
Union Minister for Road Transport & Highways Nitin Gadkari has recently said that allowing the secondary sector – accounting for over 60% of TMT production in the country – to supply steel for construction projects would not only ensure seamless supply but also result in better price discovery. The minister’s comments came in the context of the construction and real estate sectors demanding regulation to control rising steel prices.
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