The state government is examining a proposal to allot land and iron ore mines to the Central Government owned Steel Authority of India Ltd (SAIL) for setting up an integrated steel project in the state which was originally allotted to Brahmani Steels.

Brahmani Steels was promoted by the mining mafia don Mr Gali Janardhan reddy who is jailed in the illegal mining case.

The government during the YSR regime had allotted iron ore mines and a land of 14,700 acres after the tainted former Karnataka minister applied for permissions to set up a 2.5-million ton capacity captive steel plant with an investment of Rs 4,430 Cr near Kadapa.

Janardhan reddy never kept his promise and the Government served show-cause notices on his company Brahmani for inordinate delays in executing the project. The state government also thought of roping in public sector steel giants to execute the project after the CBI arrested Gali on Sept 5.

As part of the efforts of the state government, SAIL has approached the officials and sought land and iron ore mines to take up the project.

T S Appa Rao, principal secretary, industries and commerce, told journalists in Hyderabad today that the Government is examining the proposal and will take a decision in the next few days.