Cites long delay in land acquisition and adverse market conditions
Considering the significant delay and inability to get land due to people’s opposition, Posco has decided to scrap its proposed six million tonne per annum steel plant project in Karnataka.
“With the given market conditions and significant delay in acquiring the required land in Gadag, we have decided to close our proposed steel plant,” Posco-India chairman and managing director Yong Won Yoon said here on Tuesday.
“We highly appreciate the Industries Department, Government of Karnataka and Karnataka Industrial Area Development Board (KIADB) for their cooperation and cordial support in this regard. In future, if we get an attractive business proposal from the State, we may consider it and return to Karnataka,” Mr. Yoon said.
Posco had signed a memorandum of understanding with the Government of Karnataka at the Global Investors Meet in Bangalore in June 2010 to set up the steel plant. In January 2011, it chose Gadag to set up the plant and notified the KIADB. The hearing was held with the landowners in June 2011. However, progress on land acquisition was held back due to agitations by some farmers and religious leaders and the exercise was halted in July 2011.
“In addition, the mining scam in the State made the project progress slower,” the company said in a press release.
Consequently, in June 2013, both KIADB and Posco agreed upon to end this project. On July 1 this year, the KIADB officially returned the deposit of Rs. 60 crore to Posco. The amount was deposited as initial payment for land acquisition in 2010, the company added.