South Korean steel major Posco today said it is not quitting Odisha, even as its over $12 billion project has been hanging fire for almost a decade.
“That is not the fact. Due to no progress in the project area, much of office space was lying vacant in Odisha. It was decided to renovate the office space to a smaller area,” a Posco spokesperson told PTI on being asked whether there are plans to exit 12 million tonne (MT) Odisha project.
The company is reducing its unused office space and other expenditure as part of massive global cost restructuring programme, said a person in the know of developments.
Posco has announced the restructuring programme, which involves reducing “30 per cent of the overseas business within the Group”.
This will involve “early turnaround of newly run overseas business” as well as “dispose/liquidate/merger non core business within the group”.
In March as well, the company had said that it is not pulling out from the multi-billion project in the state.
“We are still on Odisha project,” a company spokesperson had said then.
He had also said that 6 employees have “voluntarily” resigned and denied it was any sign of Posco pulling out from the project.
The steel maker’s proposed $12 billion project at Jagatsinghpur district in Odisha for producing 12 million tonne per annum (MTPA) steel is viewed as the largest FDI in India.
It has, however, been stalled for about a decade due to regulatory hurdles, including delays in land acquisition.
Posco had entered into a pact with Odisha government on June 22, 2005 for the plant, which included iron ore mine development.
However apart from the delays, in a fresh blow to the company this year, the Centre has said Posco would now have to participate in auction to get iron ore mines to feed its facility instead of direct allotment as assured earlier.
Prasanta Patnaik