With the temporary closure of the Vedanta Alumina Limited (VAL) in the backward Kalahandi district for raw material shortage giving rise to questions about the success of the industrialisation process in the State, the meeting of Posco India’s Chairman-cum-Managing Director (CMD) Yong Won Yoon with Chief Minister Naveen Patnaik here on Wednesday has assumed significance.
Despite being the biggest foreign direct investment (FDI) of the country, the Posco’s steel project near Paradip in Jagatsinghpur district has not taken off for several reasons, including delay in land acquisition due to strong local resistance.
Issues relating to delay in land acquisition and the progress of the case in the Supreme Court over the captive iron ore mines at Khandadhar were discussed at the meeting.
Significantly, though the memorandum of understanding (MoU) signed between the State Government and Posco for setting up a 12-million tonne capacity steel plant expired on June 21, 2010, it is yet to be renewed. Yoon told mediapersons after the meeting that Posco had already submitted the documents for the renewal of the MoU to the State Government. The capacity of the steel plant has also been scaled down to 8 million tonne per annum from the 12 million tonne.
The State Government promised that the required land for setting up the plant would be handed over in the next two months, Yoon said and added that so far 548 acres had been handed over to the company.
The State has so far acquired 2,000 acres of land, he said and added that as soon as the rest 700 acres are acquired and handed over, construction work would be started. To a question on the decision of the State Government on supply of raw materials for projects through the state-owned Odisha Mining Corporation (OMC), Yoon said the hearing on Khandadhar mines for Posco in the Supreme Court is scheduled on November 6. “We hope the judgment will be in our favour,” he said.
On cost escalation of the project because of the delay, Yoon said it will be assessed after the work starts. He also refused to comment on the closure of the VAL at Lanjigarh.