Vexed over the lack of activity by Posco India, the Odisha government has scrapped the allotment of 1880 acres of land granted to the company for its mega steel plant near Paradip. The annulment of land has dashed all hopes of the country’s biggest FDI project.
Debi Prasad Mishra, the state’s industries minister said, the state’s land acquisition agency Idco wrote to Posco India on April 27 to cancel the land allotment. This was after three years of transfer of land to the company which remained idle.
Idco had acquired 578 acres of non-forest land and 1301 acres of forest land at Kujang and Erasama in Jagatsinghpur district. The acquired patch of land was later transferred to Posco India to facilitate establishment of a mega steel plant of 12 million tonne envisaged initially but later truncated to eight million tonne. For the eight million tonne plant, Posco India had asked for 2700 acres of land.
The state government has approved the taking back of land acquired for the Posco steel project to its land bank. Idco has already initiated work on erecting a compound wall around the land to save it from encroachment and avert law and order issues.
Posco in a letter to the state government in February this year, had expressed its lack of intent to develop the steel plant and sought surrender of land handed over to it by Idco.
Ever since the signing of a memorandum of understanding (MoU) with the Odisha government on June 22, 2005 to put up a 12 million tonne steel plant, the Posco project has been fraught with trouble. The South Korean steel behemoth had to face long, recalcitrant protests from land losers and project affected people.
Its hopes of winning the coveted Khandadhar iron ore deposits in Sundargarh district to feed its large steel plant were also dashed with the enactment of the new MMDR Act, 2015 which postulates award of mining rights through a system of transparent auctions. In a preferential treatment to Posco, the Odisha government had sought award of the mining lease to Posco India by invoking Section 11 (5) of the former MMDR Act on grounds of value addition and the project being the biggest FDI proposal.
For a brief spell, the Posco project was also entangled in a blame game between the Centre and the Odisha government. Union mines minister Piyush Goyal had recently blamed Odisha for the delays in securing various clearances by Posco. Goyal was also unruffled by Posco’s plan to mothball its Odisha project, asserting that other investors were ready to put up their projects.
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