The Orissa government on Monday said the Posco MoU, which expires on June 22, will be renewed for another five years.

?The MoU with Posco for setting up a 12-million tonne steel plant in Orissa?s Jagatsinghpur district with an investment of $12 billion will be renewed,? state steel & mines minister Raghunath Mohanty told FE. ?We have received the proposal for renewal of the MoU from Posco-India and it?s being examined by Industrial Promotion and Investments Corporation of Orissa (IPICOL),? the minister added. IPICOL is the state-owned body that provides escort services to investors in the state.

?The MoU renewal prerogative is with the state government,? said Simanta Mohanty, general manager (external relations), Posco-India. The MoU with the South Korean steel major was signed on June 22, 2005. The five-year MoU expires on Wednesday.

The Posco project, though five years late, has make a headway in recent months. The much-awaited land acquisition, the major hurdle to the project, is expected to take place soon as the resistance movement is on the wane. Currently, the socio-economic survey and the forest enumeration is going on in villages that form the core area of the project?s proposed site.

Meanwhile, Posco-India and the state government have achieved major milestones that have been laid down in the MoU. It has registered the Indian company, Posco-India, with its headquarters in Bhubaneswar. The company has already invested about Rs 300 crore.

The project has got both the stage I and II clearances from the ministry of environment and forest. It has provided Rs 105 crore towards the cost of compensatory afforestation.

The state government has initiated the process of land acquisition in three gram panchayats of Gadakujanga, Dhinkia and Nuagoan of Jagatsinghpur district. It has already recommended the prospecting licence for Khandadhar iron ore mines in favour of Posco-India. That the issue is now sub-judice is another matter. The state government has also accorded in-principle approval for the captive port at Jatadhari. The project has also got in-principle SEZ status from the Centre.

?As both the parties have made serious endeavours towards the project, there is no point in not renewing the MoU,? said a senior official of IPICOL.