Bhubaneswar (Orissa): Fresh controversy seems to be looming large over the biggest FDI in India by the South Korean steel giant POSCO.
This time it?s over the special economic zone status for POSCO, about which the central government is silent in its recently cleared National Steel Policy.
POSCO says it will be very difficult to go ahead with the project without SEZ benefits.
On June 22 when the Orissa Government signed the MOU with the South Korean steel giant it had a clause where it was clearly mentioned ?the Government of Orissa shall recommend to the Central Government and facilitate granting of SEZ status as required by the company?.
Now the state government is finding it difficult to keep this promise, as the Centre does not seem to be too lenient with POSCO on SEZ.
The recently cleared National Steel Policy is silent on the issue of SEZ for mega steel plants including POSCO.
?We are looking into the matter and will do what is in the best interest of the state,? Naveen Patnaik, Chief Minister, Orissa, said.
While the chief minister?s statement on the issue sounds more political, his cabinet colleagues have come out openly in support of POSCO and say that the state will definitely take up the issue with the Centre.
However POSCO has reacted sharply on the matter and has said that without SEZ there would be serious problems with the feasibility of the project.
?When we will be investing so much, SEZ benefits are a must. I wont like to comment further since this might embarrass the state and Central Government,? Ho-Chan Ryu, senior general manager, external relations, POSCO-India.
Two years back Paradeep and Gopalpur in Orissa were notified as special economic zones and any industry coming up in those areas were supposed to get SEZ status which entitles them for huge tax benefits.
Although the Orissa Government has signed MOU in 37 projects, not all of them will get this status.
POSCO has agreed to set up a 12 million tonne capacity steel plant at Paradeep for Rs 51,000 crore and this entitles POSCO to get SEZ benefits but never without running into controversies.
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