"Both defence activities and development projects should co-exist for overall progress of the state," Commerce and Transport minister Sanjib Sahu informed the Assembly.
Replying to a question, Sahu said the Defence Minister had earlier written to the Chief Minister requesting him not to take up any port project on the north side of the Dhamara in Bhadrak district.
The Defence ministry had objected to construction of a port at Chudamani proposed by SL Mining and Industries Limited of the Aditya Birla Group.
Since the proposed port was close to the missile testing centre at Wheeler Island in Bhadrak district and the Integrated Test Range at Chandipur in Balasore district, the Defence Research Development Organisation (DRDO) had objected to the project at Chudamani.
The state government, however, was of the opinion that the proposed port at Chudamani would not affect defence activities.
"A meeting between senior officials of the defence ministry and the state government was recently held to discuss the matter," the minister said.
The state government, he said, had informed representatives of the Defence ministry on its decision to continue the port project at Chudamani.
"We cannot sacrifice the state's interest due to objection by the DRDO. A study had ascertained that a port at Chudamani would no way affect defence activities," said a senior commerce department official.
Earlier, the state government had stopped work on two other port projects, one at Inchudi and another at Chandipur, due to objection by DRDO, the official said.
The state government had signed MoUs with five companies to set up ports on the state's coastline.
While the port project taken up by International Sea Ports Private Limited was near completion, the Gopalpur Ports Limited was working on its project.
"The work on the port project at Kirtania at the mouth of river Subarnarekha will start after land acquisition," the minister said.