Posco-India, which had initially proposed to invest $12 billion to set up a 12-million-tonne per annum (MTPA) steel plant on 4,004 acres of land near Paradip in Orissa, has submitted a revised proposal to the state government seeking transfer of 2,700 acre land in its favour for establishing a 8 MTPA factory.
“Recently the revised proposal for Ac 2700.00 land was given by Posco India for establishment of 8 MTPA steel plant,” the state government said while submitting the latest status report on India’s biggest foreign direct investment project to the Central government.
The Korean steel maker intended to build a 12 MTPA plant in its memorandum of understanding (MoU) with the state government in June 2005.
However, as the project got trapped in a quagmire of delays over the issues like regulatory approvals and local protests, it later changed its mind to go on with 2,700 acre land for the first two phases of 4 million tonne each.
The company, however, clarified that it will expand the capacity to envisaged 12 million tonne when it is provided the rest land.
In March this year, the company urged the government to handover 2,700 acre land by the end of this year, so that it can start the construction work by early 2013 and commission the first two phases of the project with combined capacity of 8 MTPA by 2016.
It had also requested the state government to take steps for building an approach road to the project site, the work for which has been stalled since last December, when a person got killed and several were injured during a clash between project supporters and opponents. However, the recent report sent by the state government did not talk about the status of approach road construction.
Though, the state government has acquired half of the required 4,004 acre land for the project, it has so far handed over only 500 acre land to the company, the report said.
Meanwhile, the Odisha government is in the final stages of signing a new agreement with Posco and its Indian subsidiary, which will replace the lapsed MoU.
The revised pact will do away with the contentious ore swapping clause. While the original MoU allowed Posco India to export low grade iron ore and import equal quantity of high grade ore from Brazil, the revised agreement will lift the export provision, only allowing the company to swap ore within the country.
[Source — Business Standard]