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Jharkhand might cancel steel giants’ MoUs
NAVTAN KUMAR  New Delhi | 13th Feb 2011

ive big companies, Tata Steel, Jindal South West (JSW) owned by Sajjan Jindal, Essar Steel, Ispat Industries (all steel companies) and Hindalco (aluminium) — have been issued show cause notices by the Jharkhand government for delay in acquiring land for their respective projects. This may lead to the termination of their Memorandums of Understanding (MoUs) with the state government.

The four steel companies have signed MoUs to produce 30 million tonnes of steel per annum (MTPA) with an investment of more than Rs 93,000 cr. Hindalco has signed an MoU to set up an aluminium smelter plant and a captive power plant of 750 MW at an estimated cost of Rs 7,800 cr. These companies have been allotted mines and have been given clearances for water consumption. But they have not shown any progress even after five years of signing the MoUs and most of them have not even acquired a single inch of land.

Jharkhand industries secretary A.P. Singh said the show-cause was issued as these companies had failed to show any progress despite being allocated iron ore mines, coal blocks and water. "This is a matter of great concern. We are providing all assistance to these companies but they are not sincere in implementing their projects," he said.

"We have served show cause (notices) to these companies asking them why their MoUs should not be terminated. We have received replies from two companies. We will review their replies and take a decision on the termination of their MoUs," he added.

The JSW had signed an MoU to set up a 10 MT integrated steel plant with an estimated investment of Rs 35,000 cr. The company needs 6,500 acres of land for the project. JSW has been allocated the Rohne coal block (joint venture) in Hazaribagh district and the Ankua reserved forest iron ore mine in West Singhbhum to meet the requirements of raw material for the proposed steel plant.

Tata Steel had signed an MoU for setting up a 12 MTPA greenfield steel plant in Seraikella-Kharsawan, with an estimated investment of Rs 42,000 cr. The company has already got prospecting licence for Ankua mines. It has also been allocated the Ganeshpur coal block.

Essar has signed an MoU to set up a 6 MT steel plant at Chaibasa with an estimated investment of Rs 12,000 cr. It also plans to set up a coal-based power plant of 1,200 MW at Chandwa (Latehar) with an estimated investment of Rs 4,800 cr.

When contacted, JSW spokesperson Arun Bhatt said, "We have got the show cause and we have duly responded to the government." He admitted that the delay in acquiring land was delaying the project.

Tata Steel, on the other hand, said it was committed to set up a steel plant in Jharkhand.

Prabhat Sharma of Tata Steel's corporate communications said, "We will honour the MoU. At the same time, we will also honour people's wishes. We will set up the plant where we get the support of the people."

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