Orissa hopeful of Centre's nod to Posco project

Orissa Chief Minister Naveen Patnaik today exuded confidence that the proposed $12 billion (Rs 54,000 crore) steel project of South Korean major Posco, billed as the country's largest FDI, would soon get the environment ministry's permission to clear forest areas.

Assurance report for proper implementation of Forest Rights Act (FRA) will be submitted to the Centre shortly, Patnaik told reporters after calling on Coal Minister Sriprakash Jaiswal mainly with the demand to raise royalty on coal to 20%.

"The government (Orissa) is preparing its report and will be submitting it shortly and I anticipate the Posco project to certainly come through. It is the biggest foreign investment in our country," he said.

Though the Ministry of Environment and Forests (MoEF) accorded conditional clearance to the 12-million-tonne-per-annum (MTPA) steel project in Orissa on January 31, it sought a pointed assurance report from the state government on the proper implementation of the provisions under FRA.

Of the total 4,000 acres of land required for the Posco project, about 2,900 acre fall under forest category.

The Orissa government, last week, maintained its earlier stand that there was no tribal inhabitant or traditional forest dwellers in the villages demarcated for mega steel plant near Paradip and assurance report will be submitted to the MoEF next week.

Posco had entered into a pact with the Orissa government for the steel venture in 2005.

On royalty, Patnaik said the state is seeking an increase in the coal royalty rate to 20% on an ad valorem basis from existing 13.

"I brought up various important issues for Orissa and our requirements of the state including the royalty on coal ... It is less and we want it 20% on the ad valorem basis," Patnaik said.

Last month, Finance Minister Pranab Mukherjee had said that the Centre is in discussion with Chief Ministers of mineral producing states, including Orissa, on their demand for increasing royalty on mining, and issue will be addressed by a proposed law.

The states had demanded that royalty rate needs to be made ad valorem for all minerals and be raised to at least 20% of the value.