South Korean steel major Posco may not get water allotment for its proposed R32,366 crore integrated steel project in Karnataka as per its preference as the state government is likely to allot water from a reservoir, situated far away from the site.
According to sources close to the development, Posco is interested in sourcing water from Tungabadra river, which is very close to the project site in Gadag district. But the state government is expected to allot water from Alamatti dam, which is around 130-km from the project site, by imposing several restrictions over withdrawal of water to run the steel plant.
Talking to FE, Karnataka Large and Medium Scale Industries Minster Murugesh R Nirani said the company wanted to have water from near by area but the government has suggested them to take water from Alamatti dam due to various reasons. ?There is no question of allowing water from Tungabadra for Posco?s project. The government is considering to allot water from Alamatti dam. That too, the company can withdraw water from the dam only when the excess water is overflowing? he said. The company will not be allowed to take water stored in the dam during lean seasons, he added. Further, he said the government is examining whether to create a small lake near the dam to store excess water from Alamatti dam at the cost of the company.
The government has notified around 3,300 acre in the Halligudi village of Mundargi taluk in Gadag district. The government is in the process of issuing notices to farmers as a part of land acquisition proceedings, for which Posco has paid R60 crore.
The government is expected to fix price for land to be acquired from the farmers in the next 2-3 months as the district level committee should negotiate with the farmers, the Minister added. With the government reluctant in allotting water from Tungabadra, it is expected that the implementation of the project may be further delayed.