By Bizodisha Bureau, Bhubaneswar, March 18, 2017 : South Korean steel major Posco finally scrapped its plan to set up a 12-million tonne (mt) steel mill in Paradip.

This is the second mega foreign direct investment (FDI) project to leave Odisha, after ArcelorMittal withdrew its big ticket steel plant project in 2013.

The South Korean steel major in a letter to the state government has sought surrender of the land allotted for the project. “We have received a letter from Posco expressing its intention to surrender the land”, an official of the state industries department said.

Incidentally, even as all activity on the construction of plant came to a grinding halt two years ago, both Posco and the Odisha government had been denying final closure of the project.

Posco had signed an agreement with the state government in June, 2005, seeking 4,004 acres of land to set up the project. But there was inordinate delay in the land acquisition due to prolonged agitation by the locals led by Posco Pratirodh Sangram Samiti [PPSS].

Eight years later in 2013, the state government could acquire 2,700 acres for the South Korean company to set up an 8-mt steel mill in the first phase. Of this, the government managed to transfer 1,700 acres to Posco only.

However, even before the Company started construction of proposed steel plant, the amendment in the Mines and Minerals Development and Regulation Act by the Parliament in January, 2015 virtually signalled the end of the FDI project.

The amended Act made it mandatory for Posco to go through the auction route to get captive mines, dashing its hopes of getting an iron ore mine for captive use according to the agreement. To make matters worse, the government did not renew the tenure of the agreement, which expired in 2010.

PPSS spokesperson, Prashant Paikray welcomed the scrapping of the project by Posco saying that it signals the final victory of the long drawn resistance movement.