Posco puts Karnataka project on hold

The South Korean steel giant Posco clarified that it has not shelved the proposed project in Karnataka, but only suspended all efforts for its implementation due to the prevailing political uncertainty in the State.

The company, however,  stressed that its priority is to the Odisha project.

“We have put a hold on our efforts for implementation of the proposed steel project in Karnataka primarily because of the political uncertainty in the State. But we have no intention of pulling out of the project. We are waiting for political uncertainty to settle down,” Posco India chairman-cum-managing director (CMD), Yong Won Yoon told a group of journalists visiting the Posco facility in Raigarh district of Maharashtra.

Initial payment

Sources in the company said about Rs 60 crore had already been submitted to the Karnataka government in 2010 as the initial payment for land acquisition for the proposed 6 million tonne per annum steel mill. The MoU for the project was signed with the State government in the same year.

Yoon said his company’s first priority is the proposed project in Odisha’s coastal Jagatsinghpur district where it plans to set up a 12 million tonne per annum steel mill in two phases: 8 million tonne in the first phase and 4 million tonne in the second. “The Odisha project is our first priority now and we are very much hopeful of seeing the project through,” he said.

The Odisha government has already acquired a majority of the 2,700 acres required for the first phase of the project. However, the acquired land is yet to be handed over to the South Korean steel major. “We hope to get the possession of the land shortly,” the CMD said.

First phase

The company is planning to commission the first phase of the Odisha project by 2018. The Odisha government is yet to either renew the Memorandum of Understanding (MoU) or sign a new one for the multi-crore project. The MoU expired in 2010. Yoon lamented that the important document was yet to be inked, despite Posco accepting all the new conditions put forward by the Odisha government. “We do not know why the MoU is yet to be renewed. We have already accepted all the new conditions put forward by the state government,” he said.

The Odisha government has been at the receiving end for going ahead with the Posco project without signing an MoU with Posco.