The Orissa government has proposed to lay down a well-defined policy for renewal of MoUs signed with industrial houses. The policy is likely to expedite the renewal of MoUs signed for the mega steel projects promoted by Posco-India, Arcelor Mittal and Jindal Steel & Power.
The state government has signed as many as 96 MoUs in steel, power, aluminium, cement, titanium and IT sectors. Of these, about 31 have been materialised, with 29 in steel, one in power and one in aluminium going into partial production. Several MoUs have expired because of failure on part of promoters to execute the project. In case of Posco-India and Arcelor Mittal, projects could not see the light of the day during the MoU period as there was stiff resistance by the locals, which made land acquisition impossible. While Posco-India?s five-year MoU expired on 21June 2010, it is yet to be renewed although more than two years have elapsed since then. Arcelor Mittal, which has proposed to put up a 12-million-tonne steel project in the state, has applied for renewal of its MoU, which expired on December 2011. Similarly, Jindal Steel & Power, which is putting up a 6-million-tonne steel project, has requested the state government to renew its MoU for a period of three years following its expiry on November 2011.
Official sources told FE that renewing MoUs has become a source of headache for the state government. Often, companies fail to execute projects within the time-frame and later insist that the state government renew their MoUs, blaming the government for the delay in non-implementation of the project. They cite problems such as delays in land acquisition and getting statutory clearances, and problems related to allotment of mines and water.