Relief to Odisha as Centre delinks port project from Posco’s steel plant plan

The Union Government’s decision to delink the port project from Posco’s plans to set up a huge steel plant in Odisha is a welcome relief to Odisha’s port sector, particularly Paradip port. The Union Government has delinked the port project from the main project, as the company is unable to satisfy the requirements to get the port component cleared.

Against captive port The Paradip Port Trust (PPT) and the Odisha Government have always opposed the proposal for a captive port by Posco due to several reasons.

First, nowhere in the country, a foreign firm, that too a non-port firm, has been allowed to set up on its own a full-fledged captive port. What we have is a terminal or jetty built and operated by a foreign port operator as a public utility, in partnership with a local entity.

Next, since the proposed steel plant would be located near Paradip port (the site identified for the plant is about 10 km from the port), PPT argued that there should be no problem for Paradip port to handle the import and export requirements of the Posco plant. Inquiries reveal that PPT has offered several proposals to meet the prospective requirements of Posco.

There are proposals to build six new berths in Paradip port and some of them could be leased out to Posco for captive use. Alternatively, Posco could join hands with PPT to build berths for its own use. There is still a third proposal for a conveyor system for transporting imports and exports between the plant and the port.

Finally, a new satellite port could be built close to the existing port by PPT, in partnership with the State Government to meet the requirements of the Korean steel giant. PPT authorities declined to comment on the probable capacity and the estimated investment for the proposed port facilities for Posco, as much would depend on the volume of imports and exports to be handled.

Normally, to produce a tonne of steel ore requires about 3.5 to four tonnes of raw materials. How much of it would be imported by the Korean firm is anybody’s guess.

Coal import As iron ore, the main raw material, is to be sourced locally, the major component of import is likely to be coal. Also, there could be project imports during the construction period.

Earlier, Posco had proposed to export a portion of the iron ore to be mined locally after meeting the requirement of the Odisha plant. But the proposal did not find favour of the Indian authorities, it is learnt.

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