The Odisha government on Tuesday assured top Posco India officials that the tripartite pact to enable renewal of lapsed Memorandum of Understanding (MoU) is in the final stage and is set to be executed soon.
The tripartite agreement will involve South Korean steel giant Posco, its fully owned subsidiary- Posco India and the state government. The pact is awaiting the nod of Chief Minister Naveen Patnaik.
A high-level team of Posco India led by its deputy managing director Ho Chan Ryu called on the state Chief Secretary B K Patnaik to deliberate on the progress of the project.
"I had discussions with Posco India officials. All formalities for signing of the tripartite agreement have been completed and it will be inked very soon. The talks also centred on land transfer to the company and the issue of environment clearance”, said Patnaik.
Posco India officials were not immediately available for comments.
The state government had recently said it was ready to transfer 2000 acres of land to Posco India for enabling work on the 12 million tonne green field steel plant to take off. Though billed as the biggest FDI with the project cost pegged at $12 billion, Posco's steel mill proposed near Paradip is yet to see the light of the day, battling land acquisition protests from locals for more than seven years.
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The project needed 4004 acres of land in all. The state government through its land acquisition agency- Industrial Infrastructure Development Corporation (Idco), had acquired 2000 acres but Posco claimed to have received only around 500 acres.
Meanwhile, the steel & mines department and the company authorities have mutually agreed to have an 'instrument of renewal' at the earliest for a span of five years.
The instrument (legal agreement) has been necessitated after the law department objected to renewal of the expired MoU with the South Korean steel firm. The MoU expired on June 21, 2010.
The revised pact will do away with the contentious ore swapping clause. While the original MoU allowed Posco India to export high alumina content iron ore and import equal quantity of high grade ore from Brazil, the revised agreement will lift the export provision, only allowing the company to swap ore within the country.
The South Korean steel major needs 600 million tonnes of iron ore of an average iron content of 62 per cent to meet the requirement of the proposed steel project.