South Korean steelmaker Posco has finally scrapped its long-delayed steel project in India and asked the Odisha state government to take back the land allotted for its $12-billion steel project.
Posco's proposed project to set up a 12-million tonne steel plant in Paradip, in Odisha has not been able to start work, mainly because of acquiring land for the project.
The state government, after years of delay, acquired 2,700 acres in 2013 for the project to set up an 8-mt steel mill in the first phase. The government had also transferred 1,700 acres of this land to Posco.
''We have received a letter from Posco expressing its intention to surrender the land'', reports quoting official sources in the state industries department said.
Posco, the world's fourth-largest steelmaker, has now written to the Odisha Industrial Infrastructure Development Corporation (IDCO) that it wants to surrender the land allotted for the project.
"Posco has asked us to take back the land as it could not utilise it as per the lease deed condition," a Reuters report quoted IDCO's chief general manager for land management as saying.
Posco, however, said surrendering the land acquired by it does not mean it would cancel the long-delayed project.
Posco said it had expressed its intention to give back the land because it "will not be used urgently".
"That has nothing to do with whether we withdraw the project," a Posco spokesman in Seoul said in a statement.
All activity on the plant had come to a halt two years ago, although both Posco and the Odisha government had denied any move to abandon it.
Posco had signed an agreement with the state government in June 2005 seeking 4,004 acres of land to set up the project. The land acquisition was delayed due to agitation by the locals, which often took a violent turn.
Finally, the government could acquire 2,700 acres in 2013 for the firm to set up an 8-mt steel mill in the first phase. Of this, the government managed to transfer 1,700 acres to Posco.
State Industry minister Debi Prasad Mishra said the land earmarked for the project will now go into the IDCO land bank.
Union power minister Piyush Goyal seemed nonchalant on Sunday when he said if one company pulls out, others will come in.
''There are more and more opportunities in India and if one company chooses to pull out, others will come in,'' Goyal said on the sidelines of the International Diamond Conference Mines to Market. On the delay in land acquisition and other policy issues as regards the Korean company, the coal and power minister said, ''It had happened during the earlier regime and now things are becoming more transparent.''