Posco-India chief Yong Won Yoon with Odisha chief minister Naveen Patnaik at the secretariat in Bhubaneswar on Wednesday. Picture by Sanjib Mukherjee

Bhubaneswar, May 16: Land acquisition remains the major bottleneck in setting up Posco’s 12-million tonne per annum steel project near Paradip in Jagatsinghpur district of Odisha.

Chairman-cum-managing director of Posco-India Yong Won Yoon today raised the land acquisition issue with chief minister Naveen Patnaik during their two-hour meeting at the Odisha secretariat.

Emerging from the meeting, Yoon said: “The government told us that they have so far acquired 2,000 acres. However, it has handed over only 500 acres. Once we get at least 2,700 acres, we will go ahead with setting up the project.”

On being asked whether the company would reduce its production capacity, Yoon said: “We still stick to our original plan of setting up a 12-million (tonne per annum) steel plant. The plant will come up in three phases. Once the land is available, we will start with an eight million tonne (per annum) plant.” Naveen said the company had assured him that they were willing to start the project with a capacity of eight million tonnes per annum.

Earlier, Posco had approached the government for 4,004 acres to set up the project. The state government had promised to hand over the land by April 2012. However, the government is yet to acquire the land in the face of stiff opposition from local residents.

On the issue of renewing the MoU, Yoon said: “Posco has already submitted its proposal to the state government. Now, the government is to take a call on this issue.”

The MoU that Posco-India signed with the Odisha government to set up the project expired in June 2010. The work came to a halt on December 19 last year following violence between the supporters and the opponents of the project.

The Posco top boos said the company was in touch with the Union ministry of environment and forest after the National Green Tribunal (NGT) on March 30 suspended environment clearance to the project.

On the issue of enhancing the investment, Yoon said: “We stick to our commitment of investing $12 billion. However, the investment will be changed keeping the cost of the construction in mind.”

In an apparent bid to turn public opinion in favour of the project, Yoon also announced that an industrial training institute would be set up at Ersama near Paradip. Yoon’s visit comes just 14 days after South Korean ambassador Kim Joong Keun meeting Naveen.

During his visit to the state, Kim Joong Keun had vented frustration over the delay in the implementation of what has come to be regarded as India’s biggest foreign direct investment (FDI) proposal.

On the other hand, villagers near the Posco project site today took out a rally and staged public meeting demanding relocation of the big-ticket project altogether from the region.

Addressing a public gathering at Nuagaon-Dhinkia border, Posco Pratirodha Sangram Samiti president Abhaya Sahu said: “Our stand remains the same as it was when the movement against Posco was launched over six years back. Under no circumstances can the project be allowed to come up. We are told that the company is no longer interested in taking possession of land in Dhinkia. It’s the people’s victory against the might of corporate giants. The company has tamely bowed down to the orchestrated resistance movement by unarmed landlosers.”

Officials said Posco-India was desperate to save the project as the prospect of getting captive iron ore mines — Khandadhar mines in Sundergarh district — was crucial to the fate of the steel plant.