With Essar Steel turning bankrupt and its case referred to the National Company Law Tribunal (NCLT) for insolvency resolution, the matter of unused land has stuck out like a sore thumb. ArcelorMittal's resolution plan for Essar Steel though approved by the committee of creditors has been legally contested by its operational creditors including Standard Chartered Bank.
An Odisha government source said, “We are closely watching the insolvency resolution
process of Essar Steel. After the company wriggles out of bankruptcy, the land can be transferred to the new promoters with a nominal transfer fee”.
The state government had previously asked Essar Steel about its plan to utilise the surplus land.
When contacted by mail, an Essar Steel spokesperson said, “We have not received any letter from the Odisha government on taking back land un-utilized by Essar Steel at Paradip. Also, we cannot comment on setting up the steel plant at this stage until the successful resolution applicant takes over”.
Essar Steel had deposited around Rs 200 crore with the authorities as land cost, assuming an average acquisition cost of Rs 15 lakh per acre. The company failed to install the steel plant as promised in a memorandum of understanding (MoU) signed with the Odisha government in 2005. Instead, Essar Steel set up a pellet complex, at Paradip, barely utilising 200 acres of land. The six million tonne pellet plant is backed by 12 million tonne benefication plant at Dabuna (Keonjhar), both facilities connected by a slurry pipeline.
The steel maker emerged the successful bidder and has been awarded the letter of intent for the Ghoraburhani-Sagasahi iron ore mine auctioned by Odisha. The mine lease is spread over 139.2 hectares and endowed with 99.59 million tonne iron ore deposits.