Steel maker yet to submit its written response.
The renewal of Memorandum of Understanding (MoU) between the Orissa government and Posco India continues to be mired in uncertainty with the company yet to officially respond to the MoU renewal draft sent by the government one month back.
The renewal of the pact for a 12 million tonne steel project in the state by the South Korean company that expired on June 21 last year, has been inordinately delayed with the state government jumping three of its timelines.
The state government's draft MoU sent to Posco India is yet to elicit any response from the company, confirmed a top official of the state steel & mines department.
"We are yet to get any written response from Posco India on the MoU renewal draft though discussions have been held unofficially. Even on the employment clause prescribed by the state government, Posco has only offered a verbal assurance and there is no written commitment,” said Manoj Ahuja, secretary (steel & mines).
The state steel & mines minister Raghunath Mohanty, however, sang a different tune when he confirmed the receipt of Posco India's response by the steel & mines department.
"Posco has submitted its response to the steel & mines department on the draft MoU sent by us. While the company has accepted certain conditions, it has sought some modifications in the MoU renewal draft. We will scrutinize their response and renew the pact very soon,” Mohanty said.
Asked if Posco had agreed to the omission of swapping clause, the minister said, “We had set a condition that the swapping of iron ore has to be omitted in the revised MoU but we haven't examined Posco India's response. Earlier, Posco had agreed to abide by the state government's employment clause.”
The contentious issue of ore swapping had ostensibly delayed the renewal of MoU with Posco India.
The previous MoU, signed on June 21, 2005, allowed the company to export 30 per cent of iron ore reserve allotted to it and import same quantity of high grade ore. The company justified this concession saying the iron ore found in Orissa had relatively high alumina content, which required blending with high grade ore for better blast furnace life and productivity.
But with the company later deciding to use Finex process, which can use low grade ore, the need for ore swapping became redundant. Moreover, the then Union minister for environment and forest Jairam Ramesh and subsequently, the state steel and mines department had opposed the inclusion of swapping clause in the renewed MoU.
Apart from exclusion of ore swapping, the new MoU draft proposes sourcing of water for the project from Hansua river close to the project site instead of earlier plan to carry water from Jobra barrage in Cuttack on river Mahanadi.
Similarly, the employment clause in the new MoU draft, to which the company has informally conceded, stipulates reservation of jobs for local people in unskilled, semi-skilled and supervisory category. It may be noted, the state government has decided to include this clause in all new MoUs and those coming up for renewal giving priority to locals in employment in various posts.
Among other things, the renewed MoU will include conditions for promotion of ancillary and downstream industries by the company, sources said.