Committed to smooth offtake of Posco project: Sharma

Written by Kiritika Suneja | Agra | Updated: Jan 29 2013, 09:09am hrs
The government on Monday said it will review South Korean steel firm Posco's R 52,000-crore project, which has been stuck for long over land acquisition and other regulatory issues.

The assurance was given by commerce and industry minister Anand Sharma to a visiting South Korean delegation at the ongoing partnership summit organised by the Confederation of Indian Industry. "We are committed to the smooth offtake of the Posco project and will look into the recent developments to expedite the project in consultation with the state agencies. The first meeting of the Cabinet Committee on Investment is day after tomorrow (January 30)," Sharma added.

The Korean side raised the issue of delays in the project clearance emphasising the importance of the project for enhancing the economic ties between the two countries. Incidentally, this is the biggest inbound foreign direct investment (FDI) proposal. Posco is concerned about the delays and we will conduct a review of the project. The Prime Minister himself has been monitoring it, Sharma said.

Sharma also said that a delegation from Abu Dhabi-based Etihad Airways is expected to meet him on Thursday, fuelling speculation that its proposed tie-up with Jet Airways could be announced as early as next week. "They are meeting me on January 31," Sharma said.

The meeting assumes significance because Jet has announced that the talks are on with Etihad for a possible stake sale. Jet's board of directors is scheduled to meet on February 1 to take on record its October-December earnings but sources say that the details of the proposed deal will also figure at the meeting. A civil aviation ministry official said on Monday that Etihad and Jet Airways have finalised a deal wherein Etihad will spend $297 million to pick up a 24% stake in the Naresh Goyal-controlled carrier.

Sharma's statement of Posco comes days after the firm got a breather from the commerce ministry, which allowed it more time to start work on the project in a multi-product special economic zone in Orissa. The company has been unable to acquire land due to protests by local villagers for development of its tax-free zone and the issue has been pending for several years. In June 2005, Posco had announced its plan to set up a 12-million tonnes per annum (mtpa) steel plant in Orissa's Jagatsinghpur. However, land for the project has not yet been fully acquired due to opposition from the local people.

For its 12-mtpa steel plant, Posco required 4,004 acres of land. However, after the Orissa government expressed its inability last year to transfer the entire land parcel in one go, the company decided to scale down the plant size to 8 mtpa initially and now needs about 2,700 acres of land. The Orissa government is believed to have acquired 2,100 acres of land so far for the project.

Posco also requires green clearances for the project as on March 30, 2012, the National Green Tribunal had suspended the green clearance granted earlier on January 31, 2011.