The Orissa government has set the ball rolling for the renewal of the Memorandum of Understanding (MoU) with Posco India for its 12-million tonne per annum steel plant, putting to rest all speculation on the future of the Rs 54,000-crore project, billed as the country's single largest FDI.
“The renewal of MoU signed with Posco India in 2005 is being processed and the renewal will be done as per the rules and regulations”, said the state Chief Minister Naveen Patnaik.
It may be noted that Posco had inked the MoU with the state government on June 22, 2005 and the tenure of the pact, which was for a period of five years, is set to expire on Tuesday.
“The renewal of MoU with Posco is only an official formality. Since work on the project is on, there should not be any difficulty in renewing the MoU with the company”, state minister for industries and steel and mines, Raghunath Mohanty had said on Sunday. Meanwhile, Posco India has sent a formal application to the Orissa government for renewal of the MoU.
“The renewal of the agreement is the prerogative of the government”, said a company spokesman. Doubts were cast on the possibility of renewal of MoU with Posco India given the negligible progress made by the South Korean steel major on its Orissa project.
The company, which needed 4004 acres of land for its project near Paradip, had failed to acquire even a single acre after five years of signing the MoU mainly due to protests spearheaded by the Posco Pratirodh Sangram Samiti (PPSS), an anti-Posco outfit active at the project site.
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Land was to be acquired primarily at Dhinkia, Gadakujang and Nuagaon panchayats in Jagatsinghpur district.
The state government had recently suggested to Posco to give up 300 acres of private land at Dhinkia in the wake of stiff protests from the villagers there.
Even as the socio-economic survey was underway for the Posco project, PPSS has intensified its protest in select pockets.
The Chief Minister recently had one round of talks with the PPSS and United Action Committee (UAC), a purportedly pro-Posco outfit, on all the contentious issues pertaining to the Posco project. Subsequent to the talks, the Chief Minister had announced that he will chose an appropriate date for visiting the Posco site.
The decision for renewal of MoU with Posco has been taken at a time when the socio-economic survey for the project is underway at the project site.
Earlier, official sources had indicated that the state government would renew the MoU with Posco India without any significant change in the terms and conditions of the pact.
Though the broad terms and conditions of the pact are unlikely to be altered, the state government will only incorporate a clause which will make it compulsory for the steel major to set up an Industrial Training Centre and absorb locals in its project.
Besides Posco India, the state government is also mulling to renew the MoUs with nine more steel players which have made satisfactory progress on their projects but have been grappling with issues like grant of mining lease, availability of water and land acquisition.
The state steel and mines department had recently reviewed the project status of all the 49 steel players which have inked MoUs with the state government. The cumulative capacity of all these projects was 83.66 million tonnes, entailing a total investment of Rs 2.3 lakh crore.