Orissa is all set to renew its MoU with steel major POSCO with a one year retrospective effect by June 30th.

Orissa’s state steel and mines minister Mr Raghunath Mohanty said all formalities required for renewal of the MoU will be over shortly and the government would revalidate the document by June 30.

The minister said that "The state government, as announced earlier, is committed to the project and the MoU renewal process would be over by June 30. At present, we are trying complete all the formalities.”

Earlier this month, the state government announced to consult South Korean steel major before recommending the revised MoU to the chief minister, Mr Naveen Patnaik for his approval. Meanwhile, all the concerned departments have put forth their views on the MoU and have suggested certain amendments to the previous MoU. One of the key points in the expired MoU was the swapping of iron ore which is likely to be excluded.

The revised Memorandum of Understanding with POSCO India will incorporate the revised project plan proposed by the South Korean steel major and also the mandatory employment clause of the Orissa government. The employment clause of the state government to which POSCO India has given its consent stipulates that industries setting up their projects in the state have to reserve 90% jobs for locals in the unskilled and semi-skilled category, up to 60% in skilled category and 30% for the supervisory and managerial cadre, while giving them the option to fill up the post of senior executives from the open market.

The South Korean company has proposed to set up their 12 million tonne per annum steel plant in three phases of 4 million tonne per annum each instead of four phases as provided in the previous MoU.

The MoU for the proposed 12 million tonne steel plant had expired on June 22nd 2010 after a period of five years.

(Sourced from ET)