Bhubaneswar: With several deadlines missed for the renewal of the MoU with Posco-India Ltd for setting up a mega steel plant in Paradip mainly due to the controversial iron ore export clause, the Orissa government on Wednesday expressed confidence the revised version would be inked by July end.
“I am confident the MoU with Posco-India will be renewed by end of July,” Steel and Mines minister Raghunath Mohanty told reporters admitting that the government had failed to meet previous deadlines.
Though the state government had earlier announced to complete the MoU renewal by June end, it failed to do so for certain reasons including the issue of iron ore export provision in the lapsed MoU, the minister said.
“Now both the steel and mines department and law department are throughly examining the matter relating to the iron ore export provision in the lapsed MoU,” Mohanty said adding that the tenure of the previous MoU expired on21 June 2010.
The state government had signed a MoU (Memorandum of Understanding) with Posco-India, a subsidiary of South Korean steel major Posco, on 22 June 2005. Though six years have elapsed since then, the company had not been able to acquire an inch of land for the purpose of setting up the Rs 52,000 crore mega steel project near Paradip.
The provision of iron ore export by the steel major had been questioned by many, including Union environment minister Jairam Ramesh.
According to the final forest clearance for the project on 2 May Ramesh had said he would like to see that the provision of the iron ore export be completely avoided in the revised MoU.
Meanwhile, though the company had agreed to accept the state government’s mandatory employment provision of reserving jobs for the local youths and committed to implement the state government’s R&R policy in toto, Posco-India was yet to give its views on the controversial iron ore export clause.
According to provisions of the lapsed MoU, the South Korean steel major would export 30% of its iron ore requirement and import an equal quantity of raw material.
Another reason for delay in renewing the MoU could be Posco’s recent proposal to set up 12 mtpa capacity steel facility in different phases and different modules.
“One has to calculate the amount of raw materials and water requirement for each phase,” the official pointed out.
Delay in MoU renewal due to different reasons has created suspicion among people who would be affected by the mega steel project, said former minister and Paradip MLA Damodar Rout.