Odisha govt to approach PMO on POSCO project issue

Odisha Sun Times Bureau
Bhubaneswar, Aug 3:  

Afraid of losing the single biggest FDI (foreign direct investment) to the state, the Odisha government today decided to approach the Centre at the highest level to take up the POSCO project issue.

“We want the Posco project to be reviewed by the Prime minister or at least at the level of cabinet secretary. The Chief Secretary of the state will soon write to the Union Mines Secretary or the Prime Minister’s office (PMO) regarding this”, Steel and Mines minister Prafulla Mallick told the media here.

Even though the state government was optimistic about the future prospects of the $12 billion project and maintained that it has not received any communication from the South Korean steel major, POSCO’s recent decision to temporarily freeze its 12 million tonne mega steel plant in the state sparked concerns on possible withdrawal.

Coupled with slowing global demand of steel and MMDR act of the Centre that denies preferential allocation of mines to any corporate without bidding, the exorbitant delay in land acquisition had already pushed the project to a dormant status. The MOU between the state government and POSCO hadn’t been renewed either.

The company, in the meanwhile, has surrendered around 7300 sq ft of its office space in Bhubaneswar citing lack of need. It is now operating out of 5000 sq ft facility compared to 12300 sq ft allotted to them initially.

To make matters worse, the South Korean steel major and the state government had been playing in a deadlock over costs incurred in land acquisition as well.  Out of the Rs 95 crore land acquisition cost raised by the Industrial Infrastructure Development Corporation (IDCO), POSCO India has so far paid only Rs 54 crore.

“POSCO is yet to respond to our letters and reminders issued thereafter on land dues”, said a senior government official.

In another significant development pertaining to POSCO, the Union Minister of State for Steel and Mines Vishnu Deo Sai today agreed in Lok Sabha that they have received a proposal from the Odisha government for grant of prospecting licence to POSCO for iron ore in Odisha.

It may be noted that the Centre on April 7, 2015, had advised the Odisha government to examine whether the application is eligible under Section 10A of the Mines and Minerals Development and Regulation Amendment Act, 2015. In case the application is found to be eligible, the Centre would take further action based on the recommendation of the state government.