South Korean steel giant Pohang Steel Company (Posco) has abandoned its plan to use the Paradip Port due to its low cargo-handling capacity and instead decided to develop a new port, six kilometres from Paradip, at a cost of about $200 million.
"In course of the ongoing feasibility study for the 12 million tonne steel project, we found that the tonnage handling capacity of Paradip was far from satisfactory. We realised that a new port with required infrastructure would suit our needs, so we are channelising our efforts in that direction," Posco sources said.
In the memorandum of understanding signed between the world's fifth largest steel maker and the Naveen Patnaik government, it is envisaged 'in case the company decides to develop a new minor port, the government of Orissa will consider granting the company necessary permission under its existing policy for development and operation of such a port.'
"The government of Orissa agrees to provide all necessary infrastructure and logistic support required for setting up of minor port by the company," according to the MoU.
Sources said the Paradip Port has a capacity to handle about 15,000 metric tonnes while the South Korean steelmaker was scouting for a port capable of handling more than 20,000 metric tonnes."We need a dedicated port for our mega steel plant and Paradip will not be able to meet our requirements. An initial investment of nearly $100 million would be required in the first phase and an equal amount of money would be needed in the second phase. The port would be built on Build Operate Transfer (BOT) basis," sources said.