Dogged by land acquisition and environmental issues, POSCO, the largest FDI steel project in the country at Jagatsinghpur in Odisha which was hanging under fire is all set to renew its MOU with the Odisha State Government in November this year. This was announced a day after the South Korean ambassador Joon-gyu Lee said that the work of POSCO project will be started early next year. The state government on Tuesday maintained that the memorandum of understanding (MoU) with the company will be renewed next month.

Government sources said the draft of the MoU is in the final stage and will be signed either by October end or in the first week of November.
The state government had signed the MoU with the Korean steel company in June 2005 to set up 12 million tonne steel plant near Paradip in Odisha at a cost of Rs 52,000 crore. The MoU lapsed in July 2010.

Meanwhile, POSCO has agreed to establish the downstream projects of the steel plant near the facility to maximize benefits to the local people. Besides, it has also dropped the swapping clause of iron which was in the original MoU. The company has agreed to give priority to local people as far as employment is concerned.

However, there are several hurdles before the project. Though the state government has been able to acquire 2,700 acres of land required for the company’s 8 MTPA plant, problems including raw material linkages and environmental clearance are yet to be overcome.

Besides, the Union Steel Ministry is pursuing the case of revalidation of environment clearances for the project with the ministry of environment and forests in a bid to expedite construction work for the steel plant.

Prafulla Samantara, national convener, Nattional Alliance of People’s Movement has termed the move as ‘dishonor to the rule of law as well as against international human rights law’.