Posco likely to begin work on $12 bn project soon: Odisha

South Korean steel giant Posco is likely to commence work on USD 12 billion project at Jagatsinghpur as the transfer of the entire 2,700 acres to it will be completed soon, Odisha government said today.

The comment comes barely a few days after the world's largest steel maker ArcelorMittal scrapped its USD 12 billion project in the state, and Posco pulled out the USD 6 billion project in Karnataka.

"We hope Posco will begin work on the project soon. The state government has completed the task of land acquisition for the first phase of the project and would transfer remaining about 1,000 acres of land to it soon," Odisha Steel and Mines Minister Rajni Kant Singh told PTI.

Posco needed 2,700 acres to commence work on first phase of the project, while the state government has already transferred 1,700 acres to it.

Singh said the state government was cooperating fully with the steel giant and according it top priority to ensure that the work starts on it.

A Posco official, who did not wish to be quoted, confirmed that work was likely to begin soon on the project after the government hands over entire 2,700 acres of the land to it.

The official said if everything goes as planned, the Phase 1 of the project might be commissioned in 2018.

Phase II would be completed three years after completion of Phase I, while Phase III will be commissioned within three years after Phase II, the official added.

A Steel Ministry official also said the government was keen that the much-delayed project moves on.

The Korean major, which is not able to set up the unit for the past seven years due to land acquisition issues and agitation by the locals, has revised its land requirement to 2,700 acres from 4,004 acres earlier.

It has also scaled down its production plan to 8 million tonnes in the first phase from 12 million tonnes earlier.

State-run Odisha Industrial Infrastructure Development Corporation (IDCO), has already handed over 1,703.68 acres of land to the steel behemoth.

The state government had signed an MoU with the South Korean company in 2005 for the 12 MTPA (million tonnes per annum) steel facility.

The project will include iron ore mine development over 30 years (total 600 million tonnes) at captive mines located in the Keonjhar and Sundergarh districts of Orissa, as well as development of related infrastructure.

Last week, facing inordinate delays in land acquisition and local opposition, Posco scrapped its proposed Rs 30,000 crore project in Karnataka.