Bhubaneswar, June 28: The construction of the much-delayed steel plant project to be set up by Posco near Paradip will start after the Odisha government hands over 2,700 acres to the company.

The progress of work was reviewed at a meeting between Posco India deputy managing director Ryu Chan and chief secretary Bijay Patnaik here on Tuesday. The government has already acquired nearly 2,000 acres and the additional land is in the process of being acquired.

Posco, which was to start its 12 million tonne per annum (MTPA) plant, has scaled down its operation to eight MTPA. The project will be completed in two phases. In the first phase, it will set up a four MTPA unit. The government and Posco authorities have already prepared a draft MoU which could be contracted just before the land is handed over to the company.

“Our government wants to take up land acquisition in a peaceful manner. Construction will start after the land acquisition,” said Patnaik. The South Korean steel major signed an MoU with the Odisha government on June 22, 2005, for establishment of a 12-MTPA integrated steel plant with an investment of $12 billion. The MoU lapsed in 2010. The project has been hanging fire for the past seven years because of resistance by local residents to the land acquisition.

Official sources said the process for the transfer of 2,000 acres had begun. The Industrial Infrastructure Development Corporation, responsible for the land acquisition, has already handed over 500 acres to Posco, said an official.

The MoU would be renewed soon, said the official, adding that the draft MoU was awaiting final approval by the chief minister. Earlier, the clauses in the MoU relating to swapping of iron ore and captive mines and captive port were opposed by Opposition parties.