Govt to withdraw land procurement process for Sterlite's steel project

Last Updated: Thu, Oct 18, 2012 19:22 hrs

After Vedanta Aluminium Ltd (VAL), a subsidiary of London listed Vedanta Resources Plc, was forced to shut its aluminium refinery in Odisha recently for want of bauxite, another group firm- Sterlite Iron & Steel Company has got a jolt.

Since the land to be acquired for the steel project to be executed by the company falls under ayacut area, the state government is all set to withdraw notification already issued for takeover of private land totaling to 1,805.85 acres. The land was to be acquired in seven villages at Polasponga, the site of the project in Keonjhar district.

The villages where notification for land acquisition was issued include Danardanpur, Gopinathpur, Narasingpur, Singraisuan, Tikarpada, Mahadeijoda and Kadagarh.

“The water resources department has raised objections to acquisition of private land in the area Hence, we are going to withdraw the notification already issued under Section 6 (1) of Land Acquisition Act. We have offered an alternative site in Sundergarh district to the company for developing its steel project,” said a senior steel & mines department official.

Company officials could not be reached for comments on the matter.

The five million tonne per annum steel plant proposed by the company in 2004 has been in limbo for many years. The plant was to be set up at a cost of Rs 12,500 crore. Sterlite Iron & Steel Company had inked an MoU (memorandum of understanding) with the Odisha government in October 2004. Since the project hardly showed any sign of taking off the ground, Vedanta Group chairman in January 2010 announced that his group will rope in engineering & construction major Larsen & Toubro (L&T) as an equity partner in the steel project. Agarwal had also said that there will be a tripartite pact between Sterlite, L&T and the Odisha government. Despite this, the project remained a non-starter.

More from Sify: