Sajjan Jindal's JSW Steel has expressed interest in the 4,004 acres earmarked for Korean steel major Posco's seemingly doomed mega project in Odisha.
A JSW Steel director recently met a senior state bureaucrat to convey to the government its interest on the land, if Posco walks away from the project, said a senior company executive. Two senior state government officials confirmed the meeting. A Posco India spokesperson didn't respond to phone calls.
"With its iron ore and coal and long coastline, there cannot be a better state than Odisha for a 6 million tonne steel plant today. And no better location than this," said the executive who spoke on the condition of anonymity.
Posco had proposed to set up a plant with a capacity to produce 12 million tonnes of steel a year at Jagatsinghpur, 10 km south of Paradeep Port, and have its own captive port dredged out of the mouth of the Jatadhari River.
JSW, the nation's second largest steelmaker with 14.3 MT capacity, had announced plans to invest $22 billion (or Rs 1.38 lakh crore) through the next decade to take capacity to 40 MT.
"We do a great job with managing our raw material and logistics, but nowhere in the world has it been possible to run efficiently an inland plant of more than 15-16 MT over a period of time," said the company executive.
At least two senior government officials in Odisha confirmed the meeting.
Of the original 4,004 acres of mostly government land identified for the $12 billion Posco project, which was the largest single FDI proposal the country has received, 1,700 acres had been handed over to Posco India. Posco has paid for only the 545 acres of non forest land of this 1700 acres.
Resistance, sometimes violent, from a section of locals that claimed historical dependence over the deemed forest land, regulatory delays and a legal battle over a captive iron ore grant have delayed the project by a decade. Many see the BJP government's move to henceforth auction all iron ore reserves, and its refusal to accommodate former Prime Minister Manmohan Singh's priority project, as the final nail in the coffin.
As ET reported in January, the government's mining ordinance renders Posco' claim over a large iron ore deposit infructuous. Taken aback, Posco India let go of a deputy managing director with more than a decade of involvement in the Odisha project, in February this years. All Indian employees at its Bhubaneshwar office have also been told to leave.
The Odisha Industrial Infrastructure Developement Corporation (IDCO) is ready for alternate investors if Posco leaves. "IDCO will be securing the land acquired with a boundary wall, and create an access road to makes access easy for Posco. If it is still not forthcoming, this land can converted into a multi-purposed industrial park," said a senior government official.
Last year, IDCO had ticked off Posco for not paying its fees. The company owes the state another Rs 32 crore in NPV(Net Present Value) dues for diversion of what is deemed forest land. A Posco India spokesperson did not respond to calls.
JSW has had Odisha, and the east, on its radar. In 2013, BJP MP Jay Panda had given Sajjan Jindal a guided aerial tour of the adjoining Kendrapada district. The company has reportedly also been in the race to acquire pellet plant of UK trader Stemcore. It was also rumoured to be in talks with Bhushan Steel to acquire its Odisha plant but has denied those reports.
On Wednesday, two senior officials also met Jharkhand's chief minister. The company had an MoU with the state which expires this month. It has made little progress on land acquisition.