Posco may miss Apr 1 groundbreaking deadline

The start of construction work for South Korean steel major Posco's Rs 51,000 crore, 12 million tonne per annum green field steel project is likely to miss the April 1 deadline set by the Orissa government due to possible delay in getting the approval for the forest diversion plan (FDP).

The company requires about 4,004 acres of land for its proposed project near Paradip. Nearly 3,100 acres of this is categorised as forest land. The project also requires felling of 2.8 lakh trees.

"The forest diversion plan is under the consideration of the Supreme Court. Unless it is approved , I can not comment on it," said Priyabrata Patnaik, nodal officer, Posco India project and commissioner-secretary, commerce and transport department.

The company is unlikely to start construction on 500 acres of non-forest government land available to it pending the approval of FDP.

"It will not be proper to start the construction on the non-forest government land when the approval of the forest diversion plan by the Supreme Court is pending," Patanik said.

The company is also not keen to start construction on a small patch now (without taking possession of the entire patch) as it is not congruent to their project design.

In this context, the start of work on the project is expected to be delayed and miss the April 1 deadline, sources added. The project, for which the MoU was signed in 2005, is already running two years behind schedule.

Meanwhile, Chang-ho Kwag, director/chief representative, Posco Research Institute, who is closely associated with the project, said, "We want to do the groundbreaking in April but if we don't get a positive response on mines then we may reconsider the timing."

Kwag was speaking on the sidelines of Steelrise 2008, a three-day conference. "Apart from mines, Posco is facing major problems in acquisition of land," he said.

However, he added that Posco was committed to the project.