The Odisha government has approved a proposal for withdrawal of land acquisition process for Sterlite Iron and Steel Company, a Vedanta group firm, which proposed to set up of a 5 million tonne steel plant in Keonjhar district.
The government has directed the revenue department to take appropriate action in this regard. “The government, after careful consideration, has been pleased to accept the land surrender proposal. You are therefore, requested to take action as per rules/act in vogue,” the state steel and mines department wrote to the deputy revenue secretary.
The decision of not to go ahead with the land acquisition process for the project was taken in October this year, following state water department’s objection to the sale of land.
The water resource department said, since more than 90 per cent of the 1,872 acre area required for the project came under the category of irrigated farm land, it should not be given to an industrial unit.
The villages, where notification for land acquisition was issued, included Danardanpur, Gopinathpur, Narasingpur, Singraisuan, Tikarpada, Mahadeijoda and Kadagarh in Keonjhar district. Out of the total area to be acquired, 1,805 acres were privately held.
The state government has offered an alternative site to the company in Sundergarh district. However, the company has been non-commital over establishment of the project.
Sterlite Iron and Steel Company had signed a MoU with the state government for the project in 2004. The proposed five million tonne per annum steel plant was to be set up at a cost of Rs 12,500 crore. However, the project hardly showed any sign of progress since.
Later, Vedanta wanted the project to be implemented by its group firm Sesa Goaand wrote to the state government to replace Sterlite Iron and Steel Company with Sesa Goa as the promoter in the MoU. It had also changed the scope of the project expressing its intention to set up a 1.5 million tonne steel plant initially instead of 5 million tonne mentioned in the MoU.
The company was also in the process of scouting for a steel company as an equity partner for the project who could take charge of the steel making operation of the plant.
Now, the withdrawal of the land acquisition process for the steel project comes as another blow to the industrial group which is reeling under the closure of alumina refinery of Vedanta Aluminium at Lanjigarh in the state for want of bauxite.
The state government is yet to come out with a solution on supplying bauxite to the plant. Though the state government had committed to provide bauxite from Niyamgiri mines, it could do not do so because of non-availability of clearances from union ministry of environment and forest (MoEF).
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