Posco withdrawal fear leads to political war in Odisha

The uncertainties over Posco pursuing its plan to set up a mega steel plant in Odisha after recent changes in mining rules has boiled down to a political war with Odisha unit of Bharatiya Janata Party (BJP) today questioning the sincerity of Biju Janata Dal (BJD) government in the state to facilitate industrialisation process as per its poll promises and the latter shifting the blame to the doorstep of the Centre citing that changes in the mining policy had created hiccups in grounding the investment.

Last Sunday, the steel and mines minister had said that Posco must clarify its intention to set up steel plant as the government was ready to supply raw material to its plant from state-run Odisha Mining Corporation and private miners through its raw material linkage policy.

BJP said, the government must say, what decisions it took regarding setting up of industries.

"Before Posco makes its stand clear, the state government must clarify what decisions it has taken to facilitate establishment of industries in the state. I doubt whether the government is really serious about setting up of mega industries here as it is engaged in only propaganda, which was evidenced in ArcelorMittal case," said Bijay Mohapatra, senior leader of BJP state unit at a press conference.

In 2013, top steelmaker ArcelorMittal scrapped its Odisha project citing weak economic conditions and difficulties in getting land and mines to push forward the project.

Similarly, Posco has been showing lack of interest over setting up a steel plant in the proposed site at Paradip ever since the Union government made it mandatory that every entity intending to own mines lease will have to participate in an auction process. The new rule is contrary to its agreement signed with Odisha government in June 2005, which said, the steel producer would be allotted a mines lease to feed its plant.

On behalf of the BJD, two ministers defended the government's industrialisation initiative.

"The state government sincerely wants Posco to set up its plant. However, since the law of the land has been undergone a change since the agreement was signed, Posco must clear its stand what should it do," said Prafulla Kumar Mallick, state steel and mines minister.

The Odisha government has provided all support to Posco for establishing the steel plant, said state industry minister Debi Prasad Mishra.

"We have made efforts to create an ease of doing business atmosphere here. As a facilitating department, we have acquired land for Posco's project. We are ready to address its raw material supply issues. But it (Posco) has not been able to take a decision whether to take forward its investment plan in view of the recent changes in MMDR Act," Mishra said.

Posco's loathness became evident earlier this month, when it refused to pay Rs 54 crore demanded by the state-run Odisha Industrial Infrastructure Development Corporation (Idco) for land acquisition dues and instead demanded refund of money paid for private land acquisition at the project site.