Orissa to challenge Posco verdict in SC by month-end

Renewal of MoU with Korean steel major on hold till Centre’s stand becomes more clear

The Orissa government is set to file a Special Leave Petition (SLP) in the Supreme Court by the end of this month, challenging the verdict of the high court here to set aside the recommendation of a prospective licence (PL) in favour of Posco India’s steel project.

“The decision to file the SLP has already been taken,” a highly placed official source told Business Standard.

Posco India had proposed to set up a 12-million tonne per annum steel factory near Paradeep at an investment of Rs 54,000 crore.

On July 14, a two-judge bench of the Orissa HC had set aside the state government recommendation for allotting a PL in favour of Posco India for the Khandadhar iron ore mines in Sundergarh district.

The rule says an SLP should be filed in the Supreme Court within three months of the HC verdict. “Taking into account the receipt of the certified copy of the HC order,10 to 12 days are left for this deadline,” the official said.

The verdict had come as a dampener for the South Korean steel major, which had got a reprieve last month after finalisation of the compensation package for project affected families at a meeting of the Rehabilitation and Peripheral Development Advisory Committee.

The HC bench of judges B P Das and B P Ray had directed the state government to conduct a fresh hearing of all 226 applicants for the Khandadhar mines. Earlier, in January 2009, the Orissa government had recommended to the Government of India for grant of a PL in favour of Posco, over an area of 2,500 hectares of these mines.

Meanwhile, the state government is understood to have put on hold the process of renewal of the memorandum of understanding (MoU) with Posco India which expired on June 22 this year. The MoU was signed in June 2005 and was valid for five years.

The state government is awaiting the right signals from the Centre to renew the MoU with Posco India. It has filed its response to the separate (and differing) reports of the Meena Gupta panel on the Posco project, and requested the Centre to allow work to continue.

“We are keen on renewing the MoU with Posco India but are waiting till a clear picture emerges from the Centre on the project,” said another top official.