Mumbai: After seven years of delay, the Posco steel project will start moving ahead soon as Odisha has started transferring around 1,500 acres to the Korean steel major to set up an 8-million tonne plant in the first phase, Odisha Steel and Mines Minister Raghunath Mohanty said on Wednesday.
However, the minister did not specify a time frame under which the land transfer will be completed.
Meanwhile, the state will also soon sign a tri-partite agreement with Posco India and its parent to revive the Memorandum of Understanding (MoU) with the Korean steel major, which had lapsed since June 2010, the minister said.
"Transfer of around 1,500 acres is underway and we hope the tri-partite agreement with the steel company will be signed soon," Mohanty said.
Earlier, after consultations with the government, Posco had decided to reduce its land requirement to 2,700 acres from over 4,000 acres.
The state has already transferred 500 acres to the company for setting up the proposed plant, which has an original capacity target of 12 mt, involving an investment of Rs 52,000 crore, making it the single largest FDI in the country.
In view of the land scarcity, the company has also decided to build an 8-mt plant in the first phase and scale it up to 12 mt later.
"They have agreed to build an 8 mt steel plant in the first phase, which will be done in two tranches of 4 mt each," Mohanty said.
Mohanty said Posco has also agreed to three major conditions which include employing a certain percentage of local people in the proposed plant, setting up downstream industries near the project and swapping of iron ore within the country.
"The steel firm has agreed to swap the iron ore within the state or within the country," the minister said.
Posco had earlier asked for swapping high alumina content iron ore found in Odisha's Khandadhar mines, which is amid a legal row, with better quality ore from abroad.
Mohanty also said the boundary wall work has already started in the project site and full-fledge work will start soon.
"Construction of boundary wall work has already started and we hope that after the tri-partite agreement and the land transfer, full fledge work will begin at the project site," he said.
The Rs 52,000-crore Posco project has been stuck for the past seven years, on the back of local opposition to land acquisition coupled with pending environment approvals.
However, the minster said local opposition to the project is fading and the long-pending project will soon start.
"I think, after slashing of land requirement and iron ore swapping issue, local opposition to the project is fading," Mohanty said.