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This is an archive article published on March 19, 2012

Ahead of Korea visit,PMO calls for Posco files

* Posco to top agenda when Prime Minister meets South Korean President

With barely a fortnight to go for Prime Minister Manmohan Singh’s visit to South Korea,his office has convened a high-level meeting on Monday to take stock of the hurdles faced by Pohang Steel Company (Posco) in setting up a Rs 54,000 crore,10 million tonne steel project in Odisha. Billed as the single largest FDI,the Posco project has been stuck since June 2005 when the company first signed a memorandum of understanding with the Odisha government.

Singh is expected to meet South Korean President Lee Myung-bak later this month,with Posco’s stuck project one of the main agenda items on the discussion table. The project will be the company’s first integrated one outside Pohang and Gwangyang in South Korea. Principal Secretary in the PM’s office,Pulok Chatterji has called Odisha chief secretary Bijay Patnaik to furnish a status update on Posco’s project. Also present in the meeting will be the Union steel secretary and Odisha government officials representing the mines and environment departments.

The project,to come up at the coastal state’s Jagatsinghpur district,has been mired in controversy due to stiff local opposition over compensation and environment concerns. It has come to a grinding halt in the wake of intense opposition by residents of at least two villages Dhinkia and Nuagaon around the project site. The Union steel ministry has been prodding the Naveen Patnaik government that signed the MoU with Posco in 2005,to iron out the hurdles. But there has been no progress with Posco yet to commence construction.

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The PMO’s fresh efforts come in the wake of the Prime Minister’s scheduled meeting with Lee Myung-bak on the sidelines of an economic summit,with Posco being one of the top talking points. Seoul has for long been asking New Delhi to expedite implementation of the project. During his last visit to India in 2010,Lee did raise the issue with Singh.

Ahead of his departure for New Delhi,Bijay Patnaik met the top brass of Posco India on Friday to ascertain the progress the company has made on the ground. Posco is clearly frustrated over the delay. While the project has consumed substantial time in securing a chunk of multi-layered regulatory approvals,it continues to face stiff opposition from the locals. The project got stuck twice with two government appointed committees (NC Saxena committee and Neena Gupta panel) submitting diverse reports.

Pulok Chatterji’s predecessor T K A Nair too had sought to mediate between the Odisha government and the company,but progress has remained elusive. The company has acquired over 1,500 acres so far for the project,but is averse to commence the groundwork in the absence of clear signals from the state government fearing an adverse law and order situation.

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