ArcelorMittal's Orissa project in limbo over payment dues

NEW DELHI: The fate of ArcelorMittal���s greenfield steel project in Orissa hangs in the balance, with the world���s largest steelmaker delaying payment to the state government for 1,500 acres meant to house the facility.

ArcelorMittal, hit hard by the global slowdown that has impacted demand for steel, has already taken over part of the land needed for its project in Jharkhand, fuelling speculation that it may go ahead in that state but delay the Orissa plant till the economy turns around.

The LN Mittal-controlled company has not reached financial closure for either project.

ArcelorMittal had announced plans to set up steel plants with a capacity of 12 million tonnes per annum each in Orissa and Jharkhand for a total investment of $20-25 billion. These projects are to be its only greenfield steel plants globally. However, the company has not paid the Orissa government Rs 30 crore for the land despite several reminders, said a state government official, who asked not to be named.

ArcelorMittal���s head for greenfield projects in India, Sanak Mishra, said while the Orissa government had asked the company to pay for the land, the company was still to respond to the demand as it was not made through the proper channel.

���Government land acquisition and transfer should have been done by Industrial Infrastructure Development Corporation of Orissa. We have already paid Rs 25 crore to the corporation for processing transfer of the land,��� Mr Mishra said, adding that he expected the process to start after the general elections are over.

ArcelorMittal India CEO Vijay Bhatnagar said the company didn���t intend to cancel the projects, but said they would be delayed by two years. ���The priorities of the company have changed. Considering the current economic situation, the greenfield steel projects certainly do not top the list,��� he said.