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South Korean steel giant Posco has called off its decision to invest Rs 32,300 crore to set up a six-million-tonne-per-annum steel plant in Karnataka. The decision follows prolonged delay in the acquisition of land by the state government at Halligudi, in Gadag district.
In a statement on Tuesday, Posco India Chairman and Managing Director Yong Won Yoon said, “With the given market conditions and significant delay in acquiring the required land in Gadag, we have decided to close our proposed six-million-tonne-per-annum steel plant in Karnataka. We highly appreciate the industries department (Karnataka) and KIADB (Karnataka Industrial Areas Development Board) for their cooperation and cordial support in this regard. If we get an attractive business proposal from the state In the future, we may consider it and return to Karnataka.”
Speaking to Business Standard, M N Vidyashankar, principal secretary, department of commerce and industries, Karnataka, said, “The company’s proposal to invest was withdrawn by them long ago, when there was a huge protest by farmers against the acquisition of their farm land for the project. There is nothing new in Posco’s statement that it is withdrawing from the state.” He added KIADB had returned the Rs 60 crore Posco had deposited to acquire land for the plant in 2010.
In June 2010, Posco had signed a memorandum of understanding with the state department of commerce and industries to set up a steel plant with a captive power generation unit. KIADB had identified 3,382 acres for Posco at Halligudi in Mundaragi taluk. However, at a public hearing, 275 farmers had filed objections against the acquisition of their farmland. A religious structure at the identified site proved to be a hurdle.
After its exit from Karnataka, Posco now has two proposals for integrated steel plants in India---a 12-million-tonne plant in Odisha and a three-million-tonne plant at Bokaro, a joint venture with SAIL. Though the company has made significant progress in land acquisition for the first phase of its Odisha project, the joint venture with SAIL is hanging fire, with both partners seeking to hold majority stake.
