Bizodisha Bureau Bhubaneswar July 16, 2015 : :  South Korean steel major has announced to put on hold its USD 12 billion steel project in the State due to delays in various regulatory approvals.

Once billed as the India’s biggest Foreign Direct Investment [FDI] project that would catapult Odisha into the big league and as one of the most favoured business destinations globally, the project faced multiple problems beginning with land acquisition, access to iron ore deposits, green regulations and other problems.

A decade after the steel giant inked a MoU with the Odisha government with much hype to set up a mega steel plant near Paradip in Jagatsinghpur district, the Posco chairman and CEO Kwon Oh Joon on Wednesday declared the project on hold.

“We are tentatively suspending the Odisha (India) project due to lack of any progress,” Posco Chairman
“Business conditions at home and abroad have changed due to drop in global steel demand, growing deficit of subsidiaries, which have led us to come to a conclusion that we must step up our reform efforts,” he said at an investor event in Seoul.

The steel major’s India spokesperson said however that it is not quitting Odisha. “That is not the fact. Due to no progress in the project area, much of office space was lying vacant in Odisha. It was decided to renovate the office space to a smaller area,” a Posco spokesperson said.

State industries minister Debi Prasad Mishra said no official communication has been received from the South Korean steel major in this regard.

Meanwhile political parties in the State accused each other following reports that Posco has decided to put its Rs 52,000-crore steel project in the State on hold.

Both Congress and BJP held the Naveen Patnaik government responsible for non-implementation of the mega steel project even after 10 years of inking of an MoU.

Ruling BJD, on the other hand, said the Opposition had no moral right to blame the state government over the issue as they delayed environmental clearance to the project when in power.

Mishra He said “Congress and BJP were opposing the project since its inception. Therefore, the Opposition has no moral right to blame the state government for it.”

“The previous UPA government had delayed granting of environmental clearance to Posco project,” he said.

Mishra said, “I understand from the news reports that Posco has decided to put its Odisha project on hold and is not withdrawing from the State.” He, however, suspected that the Posco authorities may have been peeved at the new MMDR Act, which makes provision for open bidding to avail iron ore reserves instead of getting it on the recommendation of the state government.

Meanwhile, talking to reporters, Odisha Pradesh Congress Committee President Prasad Harichandan said, “I hold the State government totally responsible for non-implementation of the Posco project. The BJD government has played with the lives and livelihood of people who lost their land, cash crops… in the name of implementation of the Posco project.”

He attributed the development to the state government’s “inefficiency” and accused the BJD government of misleading people in the name of industrialisation.

Senior Congress leader Niranjan Patnaik said the project could not materialise because the state government selected a wrong site. “Officers selected the project site without considering the local situation,” he said.

BJP leader Suresh Pujari questioned the BJD government’s sincerity towards the project.

“What was the state government doing in the last 10 years? There is no point in blaming the MMDR Act which came into force only this year,” he said.

Posco-India has written to the Odisha Industrial Infrastructure Development Corporation (IDCO) stating that it would vacate the office on the fifth floor of Fortune Towers, sources said.

Posco Pratirodh Sangram Samiti (PPSS), which has been leading an agitation against the project, hailed the news of Posco vacating its Bhubaneswar office.

“The project could not progress as it was against the interest of the common people. We thank all the persons, parties and associations that supported the anti-Posco agitation,” PPSS president Abhay Sahu said.