Orissa may cancel 7 steel MoUs

The Orissa government has issued notices to seven steel companies for cancellation of the MoUs, which the firms signed with the state government, following inordinate delay in implementation of their respective projects.

The seven companies are Sunflag Special Steel, Maharashtra Seamless, AML Steel and Power, Agrim Steel Industries, MSP Metalik, Tube Investment India and Stats Steel India. The MoUs with these companies were signed between August 2004 and November 2005.

Earlier, show cause notices as to why the MoUs should not be cancelled were issued to the first four firms. Similar notices were issued to the latter three companies following a review of progress of all steel projects by the state steel and mines department here.

The Orissa government had signed MoUs with 43 companies for setting up steel projects of various capacities in the state in the last two years.

The list of projects included a 12 million tonne steel plant proposed by South Korean steel major Posco at Paradip involving an investment of $12 million "� the largest ever FDI inflow into the country.

The progress review covered all the projects except Posco's. During the review process, it became clear that seven companies had not shown any interest to put up their projects after signing of the MoUs.

On the other hand, it became clear that 20 companies had made substantial progress in implementation of their projects by committing investments to the tune of 25 per cent of their respective project cost, thus making them eligible to apply for captive iron ore mines.

It was decided to provide the same kind of administrative support to all the mega steel projects in the state as being given to the Posco venture.

The support included deputising senior government officials to look after issues relating to land acquisition and rehabilitation, and resettlement of project displaced people.

At the meeting, the representatives of various steel companies, particularly those which had gone into production, demanded supply of iron ore at a concessional rate, pending allotment of captive mines to them.

They also drew the government's attention to the problems relating to the transportation of raw material and finished products, and also land acquisition.