The world's largest steelmaker ArcelorMittal has abandoned its much-anticipated, $12 billion steel plant in Orissa after citing "inordinate delays" and problems acquiring land.
The news comes just a day after South Korean steel giant Posco scrapped a similar project in Karnataka saying the local government had delayed approving the $8 billion dollar plant.
The project had been a long-held dream for London-based Lakshmi Mittal, ArcelorMittal's founder and majority shareholder, and was one of the biggest foreign investments in India in recent years.
A company statement said: "ArcelorMittal has met today with the Government of Orissa's chief secretary to inform him that the company has decided not to progress with its planned construction of an integrated steel plant in the district of Keonjhar."
However, the company will continue to pursue its other two projects in Jharkhand and Karnataka, it said, adding that "both of which are making steady progress".
"Over the last seven years we have invested considerable resources into this project. However, the delays relating to land acquisition and allocation of captive iron ore blocks means this project is no longer viable," said Vijay Bhatnagar, CEO of India and China for ArcelorMittal.
The scrapping of the project comes a day after the government announced an easing of restrictions on Foreign Direct Investment in a bid to shore up India's flagging economy.
However, projects across India have stalled owing to red tape, regulatory hurdles, difficulties in acquiring land and protests by locals, stalling multi-billion projects by foreign as well as local companies.BLOG COMMENTS POWERED BY DISQUS