BHUBANESWAR:After the South Korean steel major Posco put its Odisha operations on hold, the State Government launched damage control measures by stating that the project is yet to be shelved.
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“Business conditions at home and overseas have changed due to drop in global steel demand, growing deficit of subsidiaries, which have led us to come to a conclusion that we must step up our reform efforts”, he said at an investor event in Seoul on Wednesday.
“The NDA government did not want to implement the Posco project perhaps because the previous UPA regime was keen to see it through”, said BJD vice-president and Excise Minister Damodar Rout. “Much of the existing office space was lying vacant and it was deemed proper to move to smaller area”, a Posco official said when asked to verify news whether the company was looking to exit from Odisha project.
When pressed further, the spokesperson said: “Not pulling out from India”.
The company is reducing its unused office space and other expenditure that can be stopped as part of a massive global cost restructuring programme, said a person in the know of developments.
Posco-India which entered into a pact with Odisha government on June 22, 2005 for the plant, however, faced trouble in land acquisition and other legal problems leading to delay in implementation of the project. The steel maker was eventually able to overcome local opposition in 2013 and persuade the national government to acquire about 2,700 acres of land for the first phase.
Neither the Odisha government nor officials of the Steel and Mines Ministry at the Centre have formal intimation of Posco’s position, after it failed to win captive mining rights to an iron ore reserve.
“It is the highest FDI investment”.
Even though companies such as Samsung Electronics (005930.KS) and LG Electronics (066570.KS) have continued to sell products in Iran, South Korean exports to the country fell to $4.16 billion a year ago from $6.26 billion in 2012, according to the Korea worldwide Trade Association. “The company (Posco) Chairman has said that only after Prime Minister Narendra Modi intervenes, then we will consider”, BJD leader Bhartruhari Mahtab told PTI.
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To top it all, a mining law enacted by the government in March meant that the company would not get an outright mine lease, but buy a mining licence in an auction. “We will take up this issue in Parliament”.
