As Orissa frames rules, steel cosí MoU renewals face delays
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Even as Orissa makes steady progress in land acquisition for Posco-India's project in the state, the renewal of the project's MoU is likely to be delayed as the state government puts in place a separate policy for renewal of MoUs of steel projects.
Sources in the government told FE that the government is likely to set up a high-level official committee to formulate policies to this effect. According to sources, the committee will comprise top officials of related government departments such as industries, steel and mines, revenue and disaster management, water resources, and forest and environment.
The state government had signed MoUs for setting up 49 steel projects in the state. However, MoUs of many projects, including those of Posco-India, ArcelorMittal, JSPL and Essar Steel, have expired. Posco India's MoU, signed on June 22, 2005, expired in 2010, while Arcellor Mittal's, signed on December 21, 2006, expired in 2011. Similarly, JSPL's MoU, signed on November 3, 2005, expired in 2010.
In fact, the renewal of the MoUs of projects of Posco-India, ArcelorMittal and Jindal Steel & Power will be delayed further as the state government gets busy with policy formulation.
The renewal of Posco-India's MoU has already been delayed by nearly three years. Even though both the state government and the South Korean company have agreed on the final draft of the MoU renewal document, the signing hasn't happened.
A Posco-India spokesperson told FE that the Korean company is still interested in the project. "We are expecting that we will get the land in 1-2 months", the spokesperson said.
"We would immediately start the land preparation work and erect boundary walls, which would take at least two years," he added.
"Even though Posco-India is likely to get the land by April 2013, sit would not be able to start the ground-preparation work because of the absence of a valid MoU," pointed out a senior official in the state government. "Posco will have to wait till the renewal of the MoU," he said.