The Telegraph
Thursday , January 24 , 2013
Since 1st March, 1999
CIMA Gallary

Posco licence row

New Delhi, Jan. 23: The Odisha government today defended in the Supreme Court its decision to grant Korean steel major Posco licence to prospect iron ore in Sundergarh’s Kandadhar mines and not local contender Geomin Minerals, saying it was “most suitable” for the project.

Appearing before Justices R.M. Lodha and S.J. Mukhopadhyaya, senior counsel Rakesh Dwivedi questioned Geomin’s credentials, saying the company had neither offered to put up a plant till 2007, nor given any firm commitment on investments.

The lawyer for the state and Posco’s counsel K.K. Venugopal both said the Korean company was a better contender because of the huge investment it would bring. According to the counsel, Posco’s entry would lead to direct jobs for about 18,000 local residents and overall employment for 2.7 lakh people.

Venugopal said Geomin wanted to outsource the project through its plant in Mangalore, so there was little scope for investment revenue or job prospects in the state. “This (Posco’s investment) is extremely attractive and it would be a huge betrayal of people’s trust if the state did not take it up in public interest”

The court was hearing an appeal by the state and Posco, challenging Orissa High Court’s decision to cancel the licence granted to the company on the ground that other contenders with better claims had perhaps been overlooked.

Geomin opposed the apex court’s suggestion to ask the Centre to make an assessment of all potential contenders. “This court should not remit the issue to the Centre but decide itself,” counsel Jaideep Gupta said. The company also said it deserved preferential consideration as it had applied before Posco.

Under the Mines and Minerals Development Act, the Centre has the power to determine such contentious issues. Neither the state nor Posco was averse to the suggestion. Dwivedi said the state government could only recommend a prospecting licence if a major mineral was involved.

But because of Geomin’s opposition, the court decided to examine the issue on merit. The arguments would continue tomorrow.