ArcelorMittal defaulted on land cost payments: Odisha

A month after ArcelorMittal aborted its 12 million tonne steel project in Odisha citing delay in land buying for the project, the state government has blamed the steel giant for defaulting on land cost and establishment charges.

The steel maker failed to pay Rs 63.58 crore that included land cost, 10 per cent establishment charges to meet the expenses towards issue of land acquisition notification for two villages and also 10 per cent administrative charges of Odisha Industrial Infrastructure Development Corporation (Idco), the land acquisition agency of the government.

"The project authority (ArcelorMittal) did not deposit the estimated cost of land amounting to Rs 59.03 crore for which all land acquisition proposals got lapsed and the award of compensation could not be passed within two years of publication of the 6 (1) declaration. The project authority even did not deposit the 10 per cent establishment charges amounting to Rs 2 crore for which the 4 (1) proposal for acquisition of land could not be moved in two villages- Childa and Baliaposhi," industries minister Niranjan Pujari informed the state assembly through a written reply.

ArcelorMittal did not respond to the repeated reminders of the state government for depositing the land cost and 10 per cent establishment charges, he said.

The state revenue & disaster management department had issued 4 (1) notification and 6 (1) declaration during 2009-11 for acquisition of private land measuring 2,112.93 acres in seven villages where gram sabhas were conducted. In the balance seven villages, gram sabhas could not be organized due to resistance of the locals.

Idco had filed lease for 2,847.50 acres of government land and 4,905.80 acres private land in 14 villages under Patna tehsil in Keonjhar district for establishment of the steel plant and the township.

ArcelorMittal had decided to pull out of its steel project on the premise of delay in land acquisition and allocation of iron ore deposits and also law and order issues.

"Over the last seven years, we have invested considerable resources into this project. However, the inordinate delays relating to land acquisition and allocation of captive iron ore blocks means this project is no longer viable," a company release said quoting Vijay Bhatnagar, executive vice-president and chief executive for India and China.

ArcelorMittal had entered into a memorandum of understanding (MoU) with the Odisha government on December 21, 2006 for a 12 mtpa integrated steel mill whose cost was estimated at Rs 40,000 crore. The Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) had assessed the land requirement at 7,000 acres for the steel plant, 750 acres for the township and 675 acres for the rehabilitation & resettlement (R&R) colony.