Calcutta, Dec. 2: Steel Authority of India Ltd (SAIL) will more than double its investment outlay till 2011-12.

In 2004, SAIL had announced an investment of Rs 25,000 crore to increase its production to 20 million tonnes (mt) from 13mt by 2011-12.

Halfway through the plan, the steel maker has earmarked Rs 53,000 crore as capital expenditure and set a production target of 26mt.

However, even this may not be the final tally.

Given that a larger share of the order is yet to be placed, the total spend is likely to increase as equipment prices have firmed up globally.

Company chairman S. K. Roongta said there had been some cost increases. “We will come to know the final figure when all the orders are placed,” he said on the sidelines of the National HRD meet in Calcutta on Saturday. “We will place most of the orders in the next one year,” Roongta added.

The SAIL board is likely to approve the investment plan for the next 12 months, to enable the completion of the projects within time.

Roongta said the objective of the expansion plan was not only to raise output but also to upgrade technology.

Around Rs 10,000-12,000 crore will be spent on modernisation and maintenance.

Explaining the huge jump in the capital outlay, Roongta said the investments being made at the IISCO Steel Plant in Burnpur and the Salem Steel Plant in Tamil Nadu were not part of the original plan. SAIL will spend around Rs 19,000 crore in these two projects.

IISCO came into the SAIL fold in early 2006. After the takeover, SAIL announced an investment plan of Rs 10,000 crore. The initial plan for the Salem plant also saw significant changes after SAIL decided to build a special economic zone there.

SAIL’s investment outlay will be funded by a mix of debt and equity in the ratio of 1:1. Roongta said SAIL’s internal cash generation was strong for the past few years because of robust steel prices.

However, he did not rule out the possibility of raising more cash through a fresh equity offering.

The company is also gearing up for a 10-15mt plant in Jharkhand to ensure it holds on to the rights to the iron ore reserves in Chiria.

SAIL aims to maintain its share of the Indian market, which is set to grow by 16 per cent over the next five years.

For the July-September period, SAIL announced a net profit of Rs 1,700.24 crore, which is 17 per cent higher than the year-ago period.

Net profit for the first half of the year also went up 14 per cent to Rs 3,225.36 crore.

The profits came on a second-quarter turnover of Rs 10,371.63 crore and a first-half turnover of Rs 19,270.08 crore.