Posco is vacating its office in Bhubaneshwar, a move seen as an indication that the South Korean steelmaker may have finally given up on its proposed Rs 51,000 crore plant in Odisha.
Posco India has written to Odisha Industrial Infrastructure Development Corporation (IDCO), stating that it would be vacating the fifth floor space in Fortune Towers, Bhubaneshwar. The 1,000 square feet premises has been lying mostly empty as Posco is left with few employees.
In a major setback to Odisha, South Korean steel major Posco has decided to put its mega $12 billion steel project in Jagatsinghpur district on hold.
“We decided to tentatively stop the project as we have not seen visible progress. The project will remain at all stop unless the Indian government offers a better deal,” company chairman Kwon Oh-joon was quoted by The Korean Herald.
According to news reports, Kwon was addressing investors relations meet where he disclosed the company’s plan regarding its Jagatsinghpur project.
The company has remained mum about the future of the 12 million tonnes integrated steel plant – formalised with the signing of a memorandum of understanding a decade ago, in June 2005 – first since January this year even as it let go of many employees.
Prashant Paikray, spokesperson of Posco Pratirodh Sangram Samiti, which has been opposing Posco’s acquisition of 4,004 acres in coastal Jagatsinghpur, said, “No official has come around to the site after February of last year when protestors broke down the boundary wall that was being built. Their temporary office sheds were burnt. They have also vacated their Jajang office.”
“The Odisha government failed to show serious commitment for the project,” said a former Posco official who asked not to be named.
At an estimated cost of Rs 51,000 crore then, the project represented the single-largest inflow of foreign direct investment in India. However, the project did not take off despite the fact that the company downsized the scale of the plant to 8-mtpa after the land promised was reduced to almost half.
After problems related to land acquisition for the project, Posco suffered a major setback with the introduction Mines and Minerals Development and Regulation (Amendment) Bill. The doors seem to have shut on Posco’s mega steel project as the amended portions of the Act state that allotment of mines would be done solely through auctions rather than the prevailing system of preferential allotment.