The state steel & mines department has recommended the renewal of Memorandum of Understanding (MoU) with Posco India for a period of six years from June 22 this year, the date of expiry of the pact with the steel major.
The department, however, has held up the extension of the MoU with Welspun Power & Steel Ltd for slow progress of its project. The MoU with Welspun Power & Steel Ltd, which proposed to set up a 3.3 steel plant in the state, had expired on October 11, 2008.
It may be noted that the mandatory employment clause introduced by the state government had almost thrown a spanner in the process of renewal of the MoU of the South Korean steel major.
The state government had categorically stated that the employment clause seeking reservation of jobs for the locals will be mandatory and applicable for all industries who have signed MoUs or are going to sign MoUs with the state government, said minister for steel & mines Raghunath Mohanty.
Even in the case of renewal of MoUs, the state is firm on going ahead with the employment clause, he added.
Posco India had objected to the employment clause, questioning the constitutional validity of such a move.
Among other big ticket investors, the MoU with ArcleorMittal, which proposed to set up a 12 million tonne steel plant- same as Posco’s- is valid till December 22 this year. But this project is also hanging in balance due to protests over land acquisition and no movement on mining lease application.
The MoU for Essar Steel project (with a projected capacity of 6 million tonne), which had expired on April 21 this year, had been recommended for renewal for a period of three years.
The MoU with Shyam DRI Power Ltd has been recommended for renewal for two years from February 9 this year.
Three out of 50 steel companies that have entered into MoUs with the state government- Jain Steel & Power Ltd, Bhushan Steel Ltd and Deo Mines & Minerals Ltd have not applied for extension of their MoUs.
Meanwhile, the state government is in the process of examining the proposals for renewal of MoUs of five other steel players- Sterlite Industries Ltd, SSL Energy Ltd, MGM Steel Ltd, Pradhan Steel & Power Ltd and Brahmani River Pellets Ltd.
In the aluminium sector, the state industries department has recommended the extension of MoU of Aditya Aluminium which was valid till April 7, 2010.
In the auto components sector, RSB Metaltech has applied for renewal which is under the consideration of the industries department. It had signed an MoU with the state government on December 19, 2008 and the MoU had expired on December 19, 2010.
In the cement sector, the industries department has recommended for the renewal of MoU with Ultratech Cement Ltd which was valid till November 10, 2010.
In the power sector, the MoUs of 14 out of 27 Independent Power Producers (IPPs) are valid.
The energy department has not extended the MoU of Essar Power. It has extended the MoUs of Mahanadi Aban Power and GMR Kamalanga Energy for two years with effect from June 9, 2009.
The department has also extended the MoU of Monnet Power Company for three years with effect from September 25, 2009.
