1. Renewal of Posco MoU held up on failure of ‘milestones’

Renewal of Posco MoU held up on failure of ‘milestones’

The ministry officials attribute the failure of the JV on Posco’s insistence on running the operations and having over 50 per cent stake in the JV company.

By: | New Delhi | Published: December 2, 2014 8:23 AM
The union steel ministry is keen to help the project fructify, but has not been able to do much to ensure the same. (Reuters)

The union steel ministry is keen to help the Posco project fructify, but has not been able to do much to ensure the same. (Reuters)

The government on Monday said the MoU with South Korean steel company Posco has not been renewed since the company has failed to achieve stipulated milestones in setting up its project in Orissa to qualify for renewal. But the company has hit back saying it cannot be held responsible for the same.

This deals a direct blow to the company’s proposed 10 million tonne steel project worth Rs 52,000 crore in Orissa’s Jagatsinghpur district. The project has been mired in controversy for the last nearly ten years due to stiff local opposition over compensation and environment concerns.

The government’s views on the company’s proposed project was aired by minister of state for steel and mines Vishnu Deo Sai in the Lok Sabha, when he replied to a query by Biju Janata Dal MP from Jagatsinghpur Kulamani Samal on its progress, billed as one of the biggest FDI into India.

“The MoU of Posco for setting up a mega steel plant in Orissa’s Jagatsinghpur district has not yet been renewed since the company has not achieved the required milestones for renewal of the MoU,” Sai told the House. The minister’s reply is based on inputs from the Orissa government.

He also said the government is unaware about any move by the South Korean steel maker to shift its project out of Orissa to any other place in the country.

But the South Korean company says it cannot be held responsible for the delay in renewal of the MoU, which expired in June 2010 five years after it had signed the same with the Orissa government. “We are ready to sign the MoU with the state government. We are waiting a word from them in this regard,” In Gweon Lee, general, manager of Posco India told The Indian Express.

The union steel ministry is keen to help the project fructify, but has not been able to do much to ensure the same. In fact, during the erstwhile UPA regime, talks between Posco and state-run steel maker SAIL for jointly setting up a steel plant near Bokaro in Jharkhand failed owing to the turf war on the ownership of the proposed facility.

The ministry officials attribute the failure of the JV on Posco’s insistence on running the operations and having over 50 per cent stake in the JV company.

Tags: Posco India
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