Mittal's Orissa deal fuels blame game

Friday, 22 December 2006, 06:00 Hrs
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Ranchi: Arcelor-Mittal's memorandum of understanding (MoU) with the Orissa government to set up a 12-million-tonne steel plant has led to a blame game of sorts in Jharkhand, where Mittal was to set up a similar plant.

The MoU signed Thursday between Mittal Steel Company N.V., part of the Arcelor-Mittal group, and the Orissa government hints that the global steel firm might be set to wind up its proposed steel plant project in Jharkhand.

A similar agreement was reached between Jharkhand and Mittal Steel in October 2005 but Chief Minister Madhu Koda now alleges that Mittal was interested only in the state's iron ore mines and not the proposed project.

"Mittal was not interested in the Jharkhand project. The company was only interested in iron ore mines," Koda had said.

Mittal Steel is controlled by Indian born, London-based steel tycoon Lakshmi Narayan Mittal.

But former chief minister Arjun Munda says the move could be blamed on the present government's delay in allotting land to Mittal.

"What went wrong can be explained by the state government and Mittal steel. I had made efforts to ensure setting up the Mittal steel project. I visited London several times and spoke to Mittal. He was always positive about the Jharkhand project. The present government's lack of vision and delay in allotting land and iron ore mines might have caused Mittal Steel to shift its project," said Munda.

He added: "Mittal used to call me regularly and speak about the project. I was monitoring the project at a personal level. I have information that neither company representatives nor Mittal spoke to Koda. The steel project would have helped the state in emerging as a big player of the India economy."

Mittal Steel had last year signed a MoU with the Jharkhand government to set up a 12-million-tonne steel plant with an investment of 400 billion.

The steel company wanted 600-million-tonnes of iron ore for 30 years from the state's Chiria mines but the state government expressed inability to allot the mines as it was embroiled in a legal battle.

According to informed sources, Mittal, while visiting Orissa in July, had expressed dissatisfaction at the pace at which the Jharkhand project was being developed.

The Madhu Koda government's decision to review the MoU signed by the previous government seems to have sent the wrong signal to investors. The government, under Munda, had signed agreements with 45 companies worth 2.2 trillion.
Source: IANS
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