Odisha to nudge Centre on Posco review

Wary at the prospect of losing Posco, the single biggest FDI (foreign direct investment) project, the Odisha government has decided to persuade the Government of India to take up review of the Posco project at the highest level.

“We want the Posco project to be reviewed by the Prime minister or at least at the level of cabinet secretary. The state chief secretary will soon write to the Union mines secretary or the Prime minister's office (PMO) in this connection”, said state steel & mines minister Prafulla Mallick.

Posco's recent decision to temporarily freeze its 12 million tonne mega steel plant in Odisha sparked concerns on its possible withdrawal. The state government was still upbeat on the future of the chequered project while maintaining it was yet to receive any communication from the South Korean steel major.

 

Inordinate delay in land acquisition and the row over iron ore deposits also pushed the Posco project to the back foot since it signed the memorandum of understanding (MoU) with the state government in June 2005. For Posco, the latest nail in the coffin came with the promulgation of the amended Mines and Minerals (Development & Regulation) MMDR Act, 2015 that ruled out grant of any mining lease to the company.

Posco has to pay off the arrears amounting to Rs 86 crore towards land acquisition and net present value (NPV) of dereserved forest land so that the balance land can be transferred to the company.

The state's land acquisition agency- Odisha Indus-trial Infrastructure Develop-ment Corporation (Idco) had raised a demand of Rs 95 crore towards land acquisition cost. Out of this, Posco India has paid Rs 54 crore, leaving an arrear of Rs 41 crore. “Posco is yet to respond to our letters and reminders issued thereafter on land dues”, said a senior government official.

Posco India in the meantime, has surrendered around 7300 sq ft of its office space in Bhubaneswar. The steel company is now operating out of 5000 sq ft facility compared to 12300 sq ft alloted to them originally.