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Posco does not find mention in India – Korea Joint statement

Bhubaneswar, | 19 May, 2015



The fact that the much delayed Posco steel plant project did not find mention in the joint declaration of Prime Minister Narendra Modi and President of Republic of Korea, Ms Park Geun-hyi today sparked off speculations over the fate of the decade old project Though it is not known whether the Posco project, considered to be the single biggest FDI investment in the country, had figured during PM Modi’s discussions with Ms Park Geunhyi, the very fact that it was not mentioned in the joint declaration was enough to raise eyebrows here.

Significantly, the project had figured in all the previous meetings of the two heads of state right from2010 when the joint statement had committed to expeditious completion of the mega steel plant. In subsequent meetings too, the project figured and statements were issued. Even in his last meeting with the South Korean President, PM Modi had assured all cooperation and assistance to facilitate establishment of the steel plant. Statement without any reference to the Posco project in Odisha has been glaring, more so, when the project has run in to trouble over its effort to get a captive iron ore mine.

The central government has made it clear that Posco needs to participate in the auction to get iron ore mines as per the new policy. A section of the media had reported that Posco was mulling over backing out from the project in Odisha and the state steel minister Prafulla Mullick had said he would seek a clarification from the company in this regard.

Couple of days ago, Chief Minister Naveen Patnaik was asked about the fate of the project and he had said that efforts are on to see that the project gets going. It may be noted here that the MoU between the Odisha government and Posco had beensignedwaybackin2005.

The investment was projected to be around Rs 51,000 crore and Mr Patnaik had boasted that his government had attracted the single largest FDI.

But very little was done to quell the resistance over land acquisition which went on for years. The project proponents were virtually left to fend for themselves and the required 4000 acres of land could not be acquired. Posco was forced to revise its plans and configuration of the original 12 million tonne steel plant. It scaled down its land required and proposed to setup, in the first phase a eight million tone plant.Alittleover1200acres had been acquired and the company was waiting for the remaining 800 acres to be handed over to it.

Meanwhile the company which had sought a captive port and captive iron ore mines ran into rough weather with the captive mines proposal being kicked back and Forth between the state and the central government till such time as the new policy took over. The captive port proposal is also hanging fire.

Industry circles here were hoping that PM Modi’s visit to South Korea will, amongs to the things, inject life to the dormant Posco project in Odisha.

The joint statement does not talk about Posco, but it does refer to several other initiatives including Make in India, annual joint summits, Act East etc which could perhaps include Posco at a later stage hoped the diehards who feel that the steel plant needs to come up in the state. The Mittals have already withdrawn from Odisha and if Posco exits, then it will send a very bad signal, added the industrial circuit here.


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