State government sources told The Financial Express that the company, which has a steel plant on the Delhi-Gaziabad road, will soon send a high-level team to supervise land held by the Maharashtra Industrial Development Corporation (MIDC) and private property at Patalganga.

The MIDC land will be made available Rs 500 per sq m and the net outgo will be Rs 20 crore. Bhushan Steel plans to increase capacity to eight million tonnes. It will need 18 mw power and three to five million gallons of water daily. Construction will begin in two months after the necessary clearances are sought and land transfers done. The plant is likely to be commissioned in about 20 months. Sources said that the state will offer a host of concessions as the over Rs 1,000 crore plan qualifies as a "mega project."These incentives include 14 year exemption from sales tax, exemption from electricity duty and stamp duty. The company will be entitled to lease its land.

If it goes for MIDC land, the Maharashtra State Electricity Board (MSEB) will set up a 220 kv sub-station near the plant. MIDC will fund the construction of sub-stations on the basis of back-to-back interest as per the stipulated guidelines. Bhushan Steel will make an investment through both internal accruals and debt. Sources said that it has already tied up with the ICICI for debt. It has also brought to the notice of the state government about an arrangement worked out with ICICI for the stability of debt.

With Bhushan Steel's proposal, Raigad district which has been declared as the "industry district" will house leading steel manufacturing companies such as the Ispat Group, Vikaram Ispat, Uttam Steel, Uttam Galva. The district has already attracted an investment of a whopping Rs 65,000 crore.