Posco chief to meet Orissa CM in last ditch effort to save project

Bhubaneswar: The South Korean steel major, Posco, will make a last ditch effort next week to revive its 12 million tonne steel project in Orissa. The Posco-India chairman-cum-managing director, Yong Won Yoon, will meet the chief minister, Naveen Patnaik, on May 16 and discuss before taking a final call on the project.

Yoon’s meeting with Patnaik is considered to be important as the fate of the project is hanging in fire for the last seven years.

Posco-India has apparently lost patience over the inordinate delay in implementing the project. On March 1, 2012, Yoon criticised the state government for the delay in land acquisition stating that the signals are negative. He also blamed the state government for the cost and time over run of the project. Yoon’s statement caused sharp reactions in the state government.

Meanwhile, South Korea’s ambassador Kim Joong Keun had smoothened the ruffled feathers of the chief minister and the government officials involved in the project. Meeting the chief minister on May 2, 2012, he had clarified the stand of the Posco India. He said that Posco would truncate the project size from 12 million tonnes to 8 million tonnes if the required 4,004 acres of land is not available. He had assured that the company would be able to start the construction work in the second half of the year, if at least 2,700 acres of land would be physically handed over to its by the state government.

Sources in the government said that Posco-India is desperate to save the project as the prospect of getting a captive iron ore mines—Khandadhar mines in Sundergarh district—is attached to it. The state government has already recommended for the prospecting license for the Khandadhar mines in favour of Posco-India though it is now entangled in a litigation in the supreme court.

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BHUBANESWAR: Nearly two-and-a-half months after criticizing the Odisha government for delay in concretizing Posco’s mega steel project in Jagatsinghpur, Yong Won Yoon, the chairman-cum-managing director of the South Korean company’s Indian subsidiary, is slated to hold discussions with chief minister Naveen Patnaik here on May 16.

Official sources said Yoon would meet Naveen at the state secretariat on May 16 evening to deliberate on measures that could give the proposed $12 billion steel plant a much-needed push. Yoon’s meeting would follow South Korean ambassador Kim Joong Keun’s meeting with Naveen on May 2. Keun had said Posco would reduce the capacity of its proposed steel facility if the Odisha government fails to hand over the requisite 4004 acre for a mega 12 million tonne per annum plant. The envoy had also said Posco could begin construction work in the second half of this year if it could get around 2700 acre land.

The state government has so far acquired 2158 acre for the project, which has been mired in various controversies, including local resistance and legal issues, since the South Korean company in mid-2005 proposed to set up India’s biggest FDI project. On March 30, the National Green Tribunal suspended forest clearance to the Posco project.

Apparently fed up with the project not taking off, Yoon on March 1 had blamed the Odisha government for delay in lifting police restrictions on entering its steel project site and also stressed upon the need to resume infrastructure and other works at the earliest. This was the maiden occasion when the steel company had directly held the government responsible for time and cost overruns.

However, official sources said Posco was not keeping its part of the commitment when it came to putting requisite infrastructure in place. “The company had agreed to share half of the cost of the 6.5 km surge protection embankment-cum-coastal road (connecting Sandhakud basti to refinery project site), but it was yet to do so,” an official source said. The embankment-cum-road project is estimated to cost around Rs 52 crore, sources disclosed.

[Sources – Financial Express & Times of India]


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