The showpiece POSCO iron and steel project in Orissa is set to take off by October this year with the state government and the South Korean company moving ahead to remove two major irritants that have been at the centre of the opposition to the project.
While re-negotiating their 2005 MoU that expired in 2010 the state government and POSCO are nearing an agreement to do away with the captive port component of the project,sources have told The Indian Express.
The 12-million-tonne capacity iron and steel plant to be built in three phases was supposed to have a captive power plant,a captive iron ore mine,a captive port and a township project.
The port,proposed to be built next to the existing Paradip port,has been opposed by local people and several environmental groups on the ground that a vulnerable coastline would not be able to withstand the pressure of two ports in such close proximity.
In return for POSCO giving up the captive port facility,the state government is exploring the possibility of arranging a dedicated berth for the company at Paradip,sources said. Apart from meeting the requirements of POSCO,such an arrangement will also ensure a regular source of revenue to Paradip port trust.
The renewed MoU is also likely to omit the provision that enabled POSCO to export as much as 30 per cent of the iron ore from its captive mine to other countries and import a similar quantity of processed ore. This was a suggestion made by former Environment Minister Jairam Ramesh while giving his clearance to the $12-billion project last year.
I would expect that the revised MoU between the state and POSCO would be negotiated in such a manner that exports of raw material are completely avoided, Ramesh had said. POSCO had said that it never intended to export iron ore from India in any case.
As the two sides try to reach an agreement on these provisions,the state government is also learnt to have opened dialogue with protestors against land acquisition for the project in the Jagatsinghpur district. Senior state officials recently visited the affected villages to find out a workable plan to meet the demands of the protestors.
According to the compromise being devised,the requirement of private land for the project is being scaled down from the earlier 300 acres to about 80 acres. This is expected to reduce the number of affected families who will have to be rehabilitated from about 750 earlier to about 250 now.
The reduced land acquisition could also mean that POSCO might have to downsize its capacity to eight million tonnes per year for the time being from the original proposal of 12 million tonnes per year that was to be set up over a 12-year period.