Orissa to renew pact signed with Posco-10 Dec, 2010

10 Dec, 2010, 07.23AM IST,

Nageshwar Patnaik,ET Bureau

Orissa to renew pact signed with Posco



BHUBANESWAR: The Orissa government will renew the agreement signed in 2004 with South Korean major Posco, six months after its expiry, signalling the state's intention to support the completion of Posco’s steel project that has been bogged down due to bureaucratic delays.

The state-owned Industrial Promotion and Investment Corporation of Orissa has recommended an extension of the MoU for another six years. Orissa government's steel and mines department, which is the nodal body for approving such an extension, is examining Ipicol's recommendation, steel and mines minister Raghunath Mohanty said in a written reply in the Orissa assembly.

In 2004, Posco was the first global steel major to enter India, announcing its plan to build a 12-MT, $12-billion steel project in Jagatsinghpur district of Orissa, touted as the largest FDI so far in a single location. However, delays in land acquisition and slow approvals on mine linkages have pushed back the South Korean company's schedule. The delay had also prompted Posco to consider options of building a steel plant in an alternative state.

The steel minister said the department is also considering the recommendation for extension of the MoU period for Tata Steel and Essar Steel for another three years and that of Jindal Steel and Power and Jindal Steel for two years.

While the Tata Steel's MoU for the Kalinganagar steel project expired on November 16, 2009, the term of the agreement with Essar Steel's Paradip steel project was over on April 21, 2010. The MoU period for JSPL and JSL expired on November 3, 2009 and June 9, 2009, respectively.

The application of Anil Agarwal's Sterlite Industries, for extension of its agreement for a five million tonne steel project in Keonjhar district for another three years, is under consideration. The agreement had expired on April 15, 2009. The minister said the department was considering the recommendations for extension of MoUs of 30 small and medium steel projects.