Posco-India has no knowledge about renewal of its agreement with Odisha

Though optimistic of setting up a mega steel plant in Odisha's Jagatsinghpur district and commissioning it in five years, South Korean steel major Posco says it does not know about the fate of the proposed renewal of its memorandum of understanding (MoU) with the state government.

"We do not know when the MoU with Odisha government will be revised," Posco-India CMD Yong Won Yoon said. Posco-India's MoU with Odisha government had lapsed in June 2010. Even though two full years have already passed, there has been no progress in renewal of MoU.

"We have been told that the department of law has been examining the provisions of the revised MoU," the CMD said replying a question on when the revised MoU will be signed between them.

The Posco-India CMD also said the company has agreed to most of the conditions put by the state government in the revised MoU. The company has also agreed to delete the provision of swapping of iron ore, he pointed out.

Even as the company agreed to completely drop the swapping proposal, the renewal of MoU is still not in sight.

As per the original MoU, the South Korean steel major was to export upto 30 per cent of the 600 million tonne of iron ore allotted to it and import equal quantity of high grade ore.

However, during the negotiations for renewal of MoU, which expired in June 2010, the state government had sought deletion of this clause, forcing the company to dilute the plan to swapping of raw material within the country. Now the company has completely dropped the idea.

Affirming the company's commitment to set up the mega project in Odisha, the Posco-India CMD hoped the first phase of the 8 MTPA integrated steel Plant at Paradip will be commissioned in the early 2018.

Mr Yoon said that after land was handed over to the company, rehabilitation and land preparation would take two years and the construction work is expected to take three years.

Hopeful of getting a positive judgement from the Supreme Court in the controversial iron ore reserve at Khandadhar case, Mr Yoon said "the project should start immediately without further wait".

"If the court order goes against us, there are many other possibilities. We will talk to the state government on them, which includes providing us low-cost iron ore to run the project," he added.

On the state government's proposal of implementing Rs 200 crore worth of Corporate Social Responsibility (CSR) package in the project site, Yoon said "everyday a new list of CSR activity is sent to us. We cannot implement them all, particularly when the land has not been handed over to us. We will do what is good for the people".

The company, which is in the process of getting 1700 acre of land in Jagatsinghpur, was expecting another 1,000 acre soon to start construction of the 8 mtpa steel mill on first phase.

"We are hopeful of getting rest of the land very soon. We are satisfied over the recent progress in land acquisition for the mega steel project," he said.