Show cause notice to co for not honouring MoU

Bhubaneswar: Alleging non-implementation of a steel project as agreed earlier, Orissa government today issued a show cause notice to a company for "material breach" of obligation under the MoU with the state, official sources said.

The company which signed MoU with the state government on August 26, 2004 to set up a 0.48 mtpa steel mill at Kalinga Nagar steel hub, had been allotted a land at Kalinga Nagar but was found to have made little progress though it claimed to have invested Rs 40 crore in the project, they said.

The company, Maharastra Seamless Ltd (MSL) had proposed to set up the steel facility in two phases by investing Rs 450 crore. It had also proposed to set up a CPP, they said.

Senior company officials were unavailable for comment.

"You are to clarify why the MoU will not be treated as terminated for unsatisfactory performance," the show cause notice issued by steel and mines department and addressed to the company`s chief executive officer (CEO) said.

The company had been given 30 days time to reply the notice issued by the steel and mines department.

Of the 50 MoU signed steel plants in the state, only four companies including the world`s largest steel maker ArcelorMittal, had invested nothing in their respective projects by March 31, 2011 official sources said.

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