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South Korean steel giant Posco’s proposal to invest Rs 53,000 crore in a multi-product Special Economic Zone in Odisha has got a breather with the Centre agreeing to give it more time to start work on the project.
The Government was considering cancellation of the project as the company has not been able to acquire the required land in the past six years. It decided to give the company one more year to start implementation after the State government gave a letter in its support.
“The Board of Approval (BoA) for SEZs has agreed to give Posco one more year to start work on its proposed multi-product SEZ in Odisha,” a government official told Business Line .
The Centre had given in-principle approval to the South Korean steel giant’s Indian arm in 2006 for setting up a multi-product SEZ over an area of 1,620 hectares in the coastal district of Jagatsinghpur.
State endorsement
Since most of the land identified by the company for the SEZ project is in and around a forest area, the company has been facing problems getting the required clearances.
The in-principle approval for the project was extended for one year each in 2010 and 2011. The validity of the last extension expired on October 25, 2012, but the Centre refused to extend it yet again without endorsement from the State government.
In fact, at its meeting in December 2012, the BoA had said that it could consider giving Posco an extension if the Odisha Government gave a letter laying down when it expected the company to implement its project.
While the State did not specify a time-line in the letter it sent to the BoA, it said it supported an extension for approval of the SEZ, subject to the project getting all relevant clearances with various government departments.
BoA satisfied
“Posco’s SEZ proposal is one of the largest FDI investment proposals that the country has received. The BoA is satisfied with the Odisha government’s letter and has decided not to insist on a time-line,” the official said.
The extension of approval is, however, only for a year, following which the Centre will see if the project has indeed moved forward and in position to get a formal approval.
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