The Orissa government has set the ball rolling for the renewal of the MoU with POSCO India for its 12 million tonne per annum steel plant, putting to rest all speculation on the future of the INR 54,000 crore project, billed as the country's single largest FDI.

It may be noted that POSCO had inked the MoU with the state government on June 22nd 2005 and the tenure of the pact, which was for a period of five years, is set to expire on Tuesday.

Mr Naveen Patnaik CM of Orissa said that “The renewal of MoU signed with POSCO India in 2005 is being processed and the renewal will be done as per the rules and regulations.”

Mr Raghunath Mohanty state minister for industries and steel and mines had said that “The renewal of MoU with POSCO is only an official formality. Since work on the project is on, there should not be any difficulty in renewing the MoU with the company.”

Meanwhile, POSCO India has sent a formal application to the Orissa government for renewal of the MoU. A company spokesman said that “The renewal of the agreement is the prerogative of the government.” Doubts were cast on the possibility of renewal of MoU with POSCO India given the negligible progress made by the South Korean steel major on its Orissa project.
Besides POSCO India, the state government is also mulling to renew the MoUs with nine more steel players which have made satisfactory progress on their projects but have been grappling with issues like grant of mining lease, availability of water and land acquisition.

The state steel and mines department had recently reviewed the project status of all the 49 steel players which have inked MoUs with the state government. The cumulative capacity of all these projects was 83.66 million tonnes, entailing a total investment of INR 230,000 crore.

(Sourced from BS)