Arcelor, Posco fallout: Praful Patel calls for introspection

New Delhi: With ArcelorMittal and Posco scrapping projects worth USD 18 billion, Union Minister Praful Patel on Thursday said the country needs to do "introspection", while Odisha Steel Minister Rajni Kant Singh said the Lakshmi Mittal promoted company was "never interested in building the plant".
 
Their comments come in the aftermath of back-to-back jolts in a span of two days when India is trying hard to lure more foreign investments to boost its sagging economy.
 
"Posco and Arcelor plants not going ahead is not a good sign for us. This would cause both in India and abroad an impression that in India we have many constraints for new manufacturing… We have to introspect," Patel said here.
 
In back-to-back jolts within two days, world's largest steel maker ArcelorMittal on Wednesday said it was scrapping the USD 12 billion (over Rs 50,000 crore) steel plant in Odisha. The development came a day after another steel giant, South Korea's Posco, scrapped its USD 6 billion (about Rs 30,000 crore) project in Karnataka.
 
The drastic steps by two of world's leading companies were mainly due to inordinate delays, problems in acquiring land and securing raw material linkages, among others.
 
Expressing concerns that scrapping of big projects could make investors shy away from the country, Patel said: "We have to simplify processes, we have to make our systems in tune with the rest of the world."
 
"Today, the world community comes to invest in our country. They will not do so until they are assured that our laws, our systems, our rules and regulations are as transparent and as easy for them to be as they would do in their own country," Patel said.
 
Calling for introspection, Patel however, said, "We as a nation, somewhere has to sit and introspect as to how we take and make all the wheels of the economy of the vehicles move in sync with each other to achieve these objectives."
 
However, Odisha government blamed ArcelorMittal's lack of interest for scrapping the multi-billion dollars project.
 
Talking to PTI, Odisha Steel and Mines Minister Rajni Kant Singh said that ArcelorMittal was the "non-starter" and that "it was never really interested in building a steel plant in Odisha".
 
"It failed to meet major milestones though it had signed a Memorandum of Understanding with us in 2006," he noted.
 
He added that identifying land for its project was steel giant's task but it lagged on that front and the impression with the government was that the company was "not interested".
 
"At the same time, it had promised plenty of jobs but it failed to take any initiative on that front as well. Odisha is a backward state and so is Keyonjhar, a backward region, but the company never came forward for CSR activities," he said.
 
Meanwhile, Patel also wondered why India should not become one of the world's finest and cost effective steel producers since the country has abundant natural resources.