Orissa to Renew MoU With POSCO, Orissa Government Will Renew MoU With POSCO, Renewal of MoU Between POSCO and Orissa, Orissa Will Renew Pact With POSCO

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SME Times News Bureau | 22 Jun, 2010
The Orissa government is likely to renew its pact with South Korean Pohang Steel company (POSCO) to set up a $12 billion project in the state, which expired Tuesday, with some modifications.

POSCO had signed a memorandum of understanding June 22, 2005 for a 12 million tonne steel plant near the port town of Paradip in coastal Jagatsinghpur district, some 100 km from Bhubaneswar.

"POSCO has written to us early this month seeking extension of the memorandum of understanding for another five years. We are examining it. The government will take the right decision at an appropriate time" steel and mines minister Raghunath Mohanty told IANS.

"The terms and conditions in the MOU may change," he said without disclosing any detail. "Now IPICOL (Industrial Promotion and Investments Corporation of Orissa Limited) is examining the application."

IPICOL is the nodal agency for investment promotion in the state.

The Posco project, scheduled to be set up by 2016, has been delayed due to various reasons, including protests by local residents against land acquisition.

The project requires about 4,004 acres, of which 2,900 acres is forest land. The state government has received final clearance from the central forest and environment ministry for acquiring the forest land.

But there has been no progress on the ground, as thousands of villagers have been protesting against the project, saying it will displace them from their homeland and ruin their betel leaf farms.

Posco and the government maintain the project will bring prosperity and employment to an impoverished region.

"The renewal of the MOU is the prerogative of the state government," Posco-India General Manager (External Relation) Simanta Mohanty said.

A senior official of the state steel and mines department said the government may ask POSCO to exclude about 300 acres from its plan.