Indian billionaire Sanjeev Gupta is now in the same category as American entrepreneur Elon Musk in that any absurd idea he proposes – such as refurbishing disused car manufacturing plants in Adelaide to make electric cars – is taken seriously.

But of far more concern to the federal government and the state government of South Australia is how much support Mr Gupta will want for his less laughable idea to revive the old Whyalla steel works bought from Arrium Australia in September 2017, for an estimated $750 million?

Just before Christmas, Mr Gupta’s family company GFC Alliance released the final version of its plan for a ‘transformation’ of the steel works for $1 billion. That hefty sum will be financed by GFC, but the announcement notes that, ‘the transformation will also require support from the South Australian and Federal Governments’.

Anyone familiar with the long history of government supporting industrial enterprises in Australia, only for them to fail, will consider the mention of ‘support’ ominous. How much will taxpayers have to hand over to keep South Australian steel workers in jobs? While this point is being hammered out, GFC will continue with feasibility studies, to be ‘partly funded’, says the announcement, by a previously disclosed $50 million grant from the SA government.

Much of the transformation announcement makes sense, as it mentions a co-generation plant to generate power from the steel plant’s waste heat – a common theme of Mr Gupta’s investments in the UK. In that country investments in green energy have greatly increased power costs. A report to creditors by Arrium administrator KordaMentha mentions high power costs in a state grid dominated by renewable energy as one of a number of factors leading to the company falling into insolvency administration. The announcement points to a number of other changes including reducing feed costs by overhauling the way iron ore is treated or conditioned before being fed into the smelter, and modernisation of various process, all to increase production by 50 per cent to 1.5 million tonnes a year.

Reassuringly, there is no mention of the wilder proposals previously reported as being considered by GFC for its South Australian operations, including using old mining pits for pumped hydro facilities (dams) to store renewable energy. In addition, Mr Gupta has added two iron ore mining leases to his South Australian assets.

All this plus talk of further investment in the port of Whyalla at a time when the South Australian economy is suffering from the effects of its car manufacturing plants winding down – Holden’s plant in Adelaide’s northern suburbs ceased operations in October – makes Mr Gupta seem almost too good to be true.

The privately held GFC does not publish accounts and there is little independent information on just how his group works its magic on moribund plants in an industry suffering from chronic over-capacity thanks to massive Chinese investment. Even the $750 million price tag for the Whyalla plant is an estimate inferred from publicly known distributions to creditors. No sale price was announced.

However, Mr Gupta seems to have made a success of his steel industry investments since he emerged unexpectedly in the industry in 2013, after a career in commodity trading, by buying a plant in Wales.

He then astonished all of UK industry by keeping the workers of the old plant on half pay for the two years required to refurbish the plant.

Apart from reducing energy costs by using heat from the plants to generate power, and extensive modernisation of plant, commentary on his rise has repeatedly mentioned recycling of scrap iron (a major segment of the smelting industry).

In addition, at least for the Whyalla site, Arrium administrators KordaMentha, according to their reports to creditors, had already put in hard yards in rationalising operations and in getting the work force to accept some wage reductions.

Steel prices appear to have worked in Mr Gupta’s favour. According to worldsteelprices.com, in August of last year hot-rolled coiled steel sold for $US612 ($A756) a tonne. A year previously, the price was $US518 a tonne.

Whether Mr Gupta’s apparent talents in the steel industry extend to reviving South Australia’s automtotive industry remains to be seen, with his late-January proposal to buy some of the Holden plant’s equipment to make electric cars treated with considerable scepticism.

When Holden, Ford and Toyota announced in 2013 that car manufacturing would eventually cease in Australia, automotive industry executives estimated that it cost twice as much to build a car in Australia as in Asia, and 50 per cent more than Europe, due to high local wages, a high exchange rate (at the time) and short production runs, among other factors. That was all despite many billions of dollars sunk into support for the industry.

To those problems may be added the points that there is no local electric car market of any significance, and there is already considerable competition in this car segment. Aside from the Tesla 3s now emerging from the Tesla plant in the US, all the major car manufacturers have electric cars on offer or on the way. A unit of GFC Alliance already makes cars in the UK, but these obstacles would seem formidable even for a businessman undoubtedly as talented as Mr Gupta.

With federal parliament resuming business for the year, the issue of government support for EV manufacturing will come to the fore and, hopefully, be knocked over.

However, it will take a much braver government than the one headed by Prime Minister Malcolm Turnbull has proved to be, to refuse support for the refurbishment of the Whyalla steelworks. The question is just how much taxpayers will have to pay so that Mr Gupta can continue to look good.