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PrintKorean steel giant Posco is considering putting its India plans on hold.
While Posco India officials are putting up a brave face, during informal discussions they admit that things have reached a state of complete stalemate.
Posco officials have informally communicated to the Orissa Government that delay may force the company to change priorities and deploy funds in other expansion plans, highly placed Government sources told Business Line.
Sources also pointed out that there has been no revision in the company’s investment plans during the last three and a half years while late entrant ArcelorMittal has already revised its investment plans upwards.
Posco had entered into a MoU with Orissa Government for setting up a 12-million-tonne steel plant in June 2005 with a projected investment of around Rs 50,000 crore. ArcelorMittal had also done the same in December 2006 for setting up a 10-million-tonne steel plant.
Officials in the Ministry of Steel pointed out that “the Mittals have revised their investment plans and have now announced that it could go up to Rs 80,000 crore because of increase in costs in the final project outlay.”
“But there had been no official revision of Posco’s project cost till now,” an official added.
The Posco spokesperson, Mr Vikas Saran, pointed out that there is some progress in the project with respect to forest clearance, port and diversion of forestland.
However, with regard to progress in obtaining mining rights – on which the viability of the project stands – he said that “though we expect the Orissa Government to send its recommendation soon, we will not be able to suggest any timeframe for it.” –Business Line
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