Some industry observers feel that governmentÂ’s policy affected many steel projects in the country. According to one estimate, at least 35-40 million tonne of capacity has been cancelled or postponed over the past few years, putting a question mark over the steel ministryÂ’s dream of taking the installed capacity to 200 million tonne from 90 million tonne now.
The investment envisaged in the new capacity was a whopping Rs 630,000 crore, bulk of it from private steel producers.
A large chunk of that is unlikely to happen in the foreseeable future. It is learnt that 222 memoranda of understanding were signed by steel companies, which included the likes of ArcelorMittal, Posco, Tata Steel, JSW Steel, Bhushan Steel and many others, with the mineral-rich states of Jharkhand, Odisha and Chhattisgarh, starting from 2005.
But, seven years later, wrangles over land acquisition, slow-paced environmental go-aheads, controversies over allocation of raw material (iron ore and coal) and a huge shortage of iron ore have held up a majority of these projects.
Consider the case of Posco. The South Korean giant had signed an agreement with the Odisha government for a $12-billion plant in 2005, but, itÂ’s been an unending battle since, mainly over land acquisition. On June 21, the memorandum of understanding finally expired; hectic parleys are now underway for renegotiation in the terms and conditions. The story repeats itself for almost all projects. ThatÂ’s the reason for MittalÂ’s remark.
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