Delay to push up cost of Posco project by 20%

Delay in land acquisition and ancillary work has led to considerable cost escalation of Posco's 12 million tonne per annum mega steel plant near Paradip in Odisha's Jagatsinghpur district, the company claimed today.

Delay would lead to about 20% cost escalation of the project, which was pegged at around Rs 51,000 crore, Chairman-cum-Managing Director of the big ticket steel venture Yong-Won Yoon said.

"The project has been delayed by a multiplicity of factors beyond our control. We have waited with patience for over six years after the MOU was signed with the Odisha government. We are ready to wait further because the company is still prioritising the Odisha project," Yoon told PTI on the sideline of a seminar here.

Once the state government handed over 2700 acre of the required 4,004 acre, the company would resume construction. The first phase of 12 million tonne steel plant would be operational by 2016, he said.

"If the land so far acquired by the state government is handed over within this year, then the company can start land preparation by the end of this year, the main construction in early 2013, and the operation of the first phase 4 million tonne steel plant in 2016," Yoon said.

Asking the state government to lift the legal embargo on movement of company officials to the project site, Yoon said, "We have written to the government several times for the lifting of the travel ban.

"The restriction has virtually rendered Posco officials immobile. We are unable to do the ground work and win the confidence of villagers," he said.

Posco would exclude nearly 300 acre of private land at Dhinkia panchyat and acquire land from affected people interested willing to hand it over, Yoon added.