Posco Ramps Up Orissa Project Implementation Schedule Business Standard Our Correspondent

Posco ramps up Orissa project implementation schedule Business Standard Our Correspondent

by Bhubaneswar

19th December 2005

South Korean steel major Posco has made some changes in the scope and implementation schedule of its proposed 12 million tonne integrated steel plant in Orissa. The changes were put into effect by the Posco board which met in Seoul, South Korea today.

The company has decided to ramp up the first phase capacity of the venture from three million tonne to four million tonne at about $3.7 billion (Rs 16,650 crore).

Earlier, the company, in the memorandum of understanding (MoU) signed with the Orissa government in June this year, had mentioned that the project would be set up in four modules of three million tonnes each.

According to the revised schedule, the project has been divided into three phases of equal capacity with the final capacity remaining unchanged at 12 million tonne per annum.

Of the four million tonne to be produced in the first phase, 1.5 million tonne would be slab and rest would be value-added hot-rolled steel products, as against three million tonne slab that was mentioned in the original MoU.

These slab and hot rolled steel would be used for export as well as domestic use. The first phase of construction is now expected to be completed by December 2010, six months later than the original date of June 2010. This delay will be owing to the increase in capacity and equipment changes, said Ho Chan Ryu, team leader Posco-India.

However, the final completion of Integrated Steel Works will be earlier than the original schedule of 2016, he added. Since the signing of the MoU in June 2005 and the setting up of Posco's Indian subsidiary in August 2005, the company has made a capital investment of $51.3 million in the project.

Posco India's steel plant project is the largest foreign direct investment in India and is a significant part of the company's strategy to enhance its global competitiveness. The proposed investment is around $12 (Rs 51,000 crore).

Posco's Orissa project is expected to create about 48,000 jobs in the region and around 4,67,000 man years of employment during the construction phase. A total of $278.6 billion is the projected economic effect of the project, considering taxes and royalty incomes for the central government, as well as the Orrisa government.

Ryu said the approval of the project details by Posco's board of directors today was yet another milestone in the history of the Posco-India project. It reflects their faith in and commitment to India and takes us a step closer to realizing our vision for Orissa and the global steel industry, he added.