The Hindu Business Line : Orissa inks MoU with POSCO — Biggest-ever FDI investment at Rs 51,000 cr

The Orissa Chief Minister, Mr Naveen Patnaik, and the POSCO Chairman, Mr Ku Taek Lee, after the signing of the MoU in Bhubaneswar on Wednesday. — Ashoke Chakrabarty

Bhubaneswar , June 22

THE much talked about memorandum of understanding between Korean steel-maker Pohang Steel Company (POSCO) and the Orissa Government for a 12-million tonne per annum steel plant in the State was signed at the Secretariat here this afternoon.

The MoU was signed by Mr Soung-Sik Cho, Executive Vice-President of POSCO, and Mr Bhaskar Chatterjee, State Steel and Mines Secretary, in the presence of Mr Naveen Patnaik, Orissa Chief Minister, and Mr Ku-Taek Lee, Chairman and Chief Executive Officer of POSCO. The Korean Ambassador to India, Jung Il Choi, was also present.

The proposed integrated steel plant will be set up at Paradip in Jagatsinghpur district at a cost of Rs 51,000 crore — the biggest-ever foreign direct investment in the country. For POSCO, the fifth-largest steel maker in the world, this would be the first project outside Korea.

The project would be completed in two phases, each comprising two modules of 3-million tonnes capacity per annum. The first module is scheduled for completion by June 2010. Thereafter, 3-million tonnes capacity would be added every two years, enabling the plant to reach full capacity by 2016.

As per the MoU, POSCO will set up a company registered in India by August this year to apply for mining leases, as well as carry out all related operations.

To meet the raw material requirement, nearly 600 million tonnes of iron ore from mines in Keonjhar and Sundargarh districts would be made available for captive use over a period of 30 years. The entire project, including mining, steel plant and port activity, is likely to generate direct employment for 13,000 persons and indirect employment for 35,000. At the construction stage, Posco would need more than 18,000 skilled workers daily.

The steel plant is expected to generate revenues for both the Central and State Governments. The Centre is likely to benefit to the tune of Rs 89,000 crore over a period of 30 years through excise and customs duties, service taxes and corporate income tax. The Orissa Government would gain Rs 22,500 crore in various taxes.

Orissa has in all signed 37 MoUs with various steel companies, with a total production capacity of 47.7 million tonnes per annum.

The Secretariat had turned into a fortress since morning, in view of a demonstration by some political parties opposing the deal. with Posco.

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