Posco tripartite agreement after Naveen's nod

All formalities for signing of a tripartite agreement between Odisha government, Posco and its Indian subsidiary Posco-India has been completed and only Chief Minister Naveen Patnaik’s nod is awaited to go ahead with the process, according to state steel and mines and industries minister, Raghunath Mohanty.

“Posco has agreed upon all our suggestions about not swapping iron ore outside the country and about setting up ancillary industry near the plant area. The final draft (for the tripartite agreement) is complete. We are awaiting the CM’s approval to start the process,” Mohanty said.

It may be noted, the original five year term of MoU (memorandum of Understanding) between the Odisha government and Posco had lapsed in June, 2010. Since then there has been talks between the two parties on renewal of MoU with some changed conditions related to swapping of iron ore and inclusion of clause on priority to local employment and setting up of ancillary and downstream park.

The pitch for renewal of MoU was later queered with the state law department opining that the MoU cannot be renewed post-expiry and the state has to sign a tripartite agreement with Posco India and its parent company in Seoul in its place.

Accordingly, the steel & mines department and the company authorities have agreed to have an ‘instrument of renewal’ at the earliest for a span of five years, a day after Posco India chairman cum managing director Yong Won Yoon met chief minister Naveen Patnaik last month.

Posco has said it is ready to start construction activity for eight mtpa plant on receipt of 2,700 acres of land from the state government, raising capacity subsequently to 12 mtpa after getting the remainder land. The company needed 4,004 acres for its greenfield steel mill proposed near Paradip.

It has clarified that it had no intention to downsize capacity of its proposed 12 mtpa steel mill.