File picture of villagers in Posco zone

Bhubaneswar, Nov. 28: The state government is hopeful about the future of the much-delayed steel project of South Korean company Posco to be set up near Paradip.

“The project work has not started. But, the state government is optimistic about its future,” state steel and mines minister Prafulla Kumar Mallick informed the Assembly.

The hope stems from the fact that Prime Minister Narendra Modi had assured his South Korean counterpart on November 13 that the Posco project would be expedited. Two days later, chief minister Naveen Patnaik also expressed hope that the hurdles for the project would be cleared shortly.

Last month, Posco India chairman-cum-managing Gee Woong Sung had met Naveen and assured him that they would not withdraw from the project.

Soon after, Union steel secretary Rakesh Singh visited the state to review the progress of Posco and other mega projects. “Both the central and state governments are committed to the Posco project in Odisha. We are very keen and confident of the project,” he had told reporters after the review.

Posco had signed an MoU with the state government on June 22, 2005 to set up 12 million tonne steel plant near Paradip. But, the project has run into rough weather due to agitation by the villagers to be displaced and several legal hurdles related to statutory clearances and delay in grant mining lease.

Later, Posco decided to downsize the project from 12 million tonne capacity to eight million tonne project and curtailed its land requirement from 4,004 acres to 2,800 acres.

The steel and mines minister today said the state government had so far leased out 2,752 acres to the state-owned Industrial Infrastructure Development Corporation Limited (Idco), which is acquiring land for the steel-maker. Out of this, the corporation has handed over 1,880 acres to the company.

Giving an update on the progress on other fronts, Malick said the state government had renewed agreement with the company for supplying 3.5 lakh cusec water to its plant on January 25, 2010. Besides, the steel-maker had executed a bilateral agreement with the state-owned Odisha Power Transmission Corporation Limited on April 5 in the same year to draw 24MW power during the construction stage, he said.

The steel-maker has also obtained environment clearance from the ministry of environment and forests and no-objection certificate from the state pollution control board for the first phase of the project, said the minister.

On the matter of mining lease, Mallick said the Union mines ministry had asked the state government on October 10 this year to submit separate recommendations for notified and non-notified areas of Khandadhar iron ore reserves for prospecting licence. Accordingly, the state government has submitted its proposal for grant of prospective licence for 2082 hectares on November 1. “The Centre’s consideration is pending,” he said.