The state has come out with this clarification following allegations of the Comptroller and Auditor General (CAG) that the companies, proposing to set up their projects in the state, were not adhering to the timeline for financial closure as mentioned in the MoUs.
“The purpose of the MoU (memorandum of understanding) is to provide comfort to the investors. Since land is the main constraint for implementing the project besides other statutory clearances, there has been unavoidable delay at times to adhere to timely financial closure. Some delay has been caused because of local resistance as well,” the state government stated in its compliance to CAG’s observations. Citing audit check of 19 MoU signed steel players, the CAG had pointed out that none of the promoters except Eastern Steel and Power Ltd adhered to timely financial closure as mentioned in the MoU. Eleven (11) out of these 19 players submitted financial closure after delay ranging from three to 39 months compared to the prescribed time-frame of 12 months. The rest seven players were yet to submit the financial closure till the date of audit (November 2012).
The state government said regular review and monitoring has been undertaken at different levels and of 49 steel MoUs signed, 30 have already commenced production.