Posco might need rail freight rescue line

A possible extension in the eastern side of the Dedicated Freight Corridor (DFC) being put through by the railways could, if it happened, be a lifeline for the still-stuck integrated steel project of Korea's Posco in Odisha.

The Union ministry of environment and forests (MoEF) had recently given a green signal to the Rs 52,000-crore project but is still reluctant to give clearance to the associated proposal for a captive port, as this comes under a 'high-erosion zone'.

However, said a senior MoEF official, "The state is batting for an extension of the eastern DFC (from Ludhiana to Dankuni, near Kolkata). A proposal is in place through which the Posco project can be linked to the DFC project." This would help the company in reducing dependence on the proposed captive port and in enabling evacuation of finished products once it starts production, probably by 2018, he added.

For the initial usage, the company has the option of using the Paradip, said the official.

Posco had got its first clearance to build a port, at the Jatadhari river, in May 2007; there was five-year validity. Now, local fishermen have sought intervention of the National Green Tribunal against a nod to the port.

Posco says the port is crucial for the 12-million-tonne-a-year project to start work.

An Odisha government official said there was no proposal yet from the state to connect the project to DFC. However, state chief minister Naveen Patnaik had written to Prime Minister Manmohan Singh last year for an extension of DFC to Visakhapatnam, via Odisha. The CM had said an expansion of the line would ensure investment worth Rs 8.85 lakh crore in the state.

In addition, when the eastern DFC initially took shape, the railways had said the projects in the state of Tata Steel, Mittal Steel and Posco were among those which would raise iron and steel movement on the corridor to 14.63 million tonnes by 2021-22.

"As of now, there is no plan for a link to Odisha for the corridor. The project is expected to be over by 2018 but raising funds is a major concern for us," said a senior official from Dedicated Freight Corridor Corporation.