Orissa steel project back on track, says POSCO

South Korean steelmaker POSCO will start construction early next year of its $12 billion steel plant near Paradip port in Orissa, which has been delayed by local protests, the company president said.

The plant in Orissa state, touted as India's biggest foreign direct investment, has been delayed by more than two years due to protests by farmers unwilling to give up their land for the project.

The company, which had hoped to begin construction in April last year, now expects to complete land acquisition by the end of this year, clearing the way to start construction next year. The world's fourth-largest steel maker is seeking about 4,000 acres of land, of which a large part is forested. Activists have said the construction will force villagers off farmland and displace about 20,000 people.

"We have almost solved problems. From early next year we will start our land levelling work," Lee Dong-hee, POSCO India's president and chief investment officer, told reporters in Bhubaneshwar on Wednesday after a meeting with Orissa chief minister Naveen Patnaik and other senior officials.

He dismissed media reports that the company planned to relocate the project from the planned site at Dhinkia near Paradip port. "We have never changed our plan," Lee said. 

POSCO had signed a memorandum of understanding with Orissa state in June 2005 for the 12-million-tonne-capacity steel plant to be built in three phases by 2016, with production scheduled to begin by the end of 2011 on the completion of the first phase.