teel giant ArcelorMittal, which has proposed to set up three greenfield steel plants of a combined capacity of 30 million tonne per annum (MTPA), at an estimated investment of more than Rs 100,000 crore, is scaling down its operations in India because of tardy progress. Sources said that thus the company is preparing to wind up its operations in India as it does not see any significant progress in the next few months. Its projects have proved to be non-starters in Orissa, Jharkhand and Karnataka because of land hurdles and procedural delays.

As the company starts downsizing, its project in-charge in Jharkhand P.S. Prasad, has been shifted to Liberia, where he has been made the head of mining operations. Although the company has not laid off anyone yet, its officers are looking for other options as they do not have much work. Fresh hiring has stopped. Two senior officers working with the corporate communications department in New Delhi have resigned. The department is now being looked after by a senior manager.

Earlier, a number of officers working with departments such as corporate social responsibility and finance, among others, left the company. Their posts have not been filled. ArcelorMittal, which had 100 plus employees all over the country, is now left with around one fourth of the original strength. Sources say that while the company has not been able to acquire even one acre of land in Orissa, it has purchased only 2 acres in Jharkhand's Bokaro. Its memorandum of understanding with the Orissa government has not been renewed for the past one year. Higher compensation sought by farmers has prevented the Karnataka Industrial Area Development Board (KIADB) from acquiring land for a 6 MTPA project, which was supposed to come up in Bellary. The board identified more than 2,500 acres of land for the project. In Jharkhand, the company earlier identified the Gumla-Khunti locality for its project, but had to shift to Bokaro because of stiff resistance from the tribals. But there also it was not able to get land. It even went for the "consent award" route to acquire land, but that too did not help. As a result of the impasse, the activities of the company's corporate social responsibility department has been scaled down.

Officially, however, all the three projects are still "on".

In June last year, company chairman and CEO L.N. Mittal had said in the United States that "India is potentially condemning hundreds of millions to remain in poverty longer than previously anticipated". To this, Union Steel Minister Beni Prasad Verma had asked him to stop maligning India. Regarding the problems faced by the company, Verma had said that "Mittal never contacted me". Sources say that the Orissa and Jharkhand projects are unlikely to see the light of day, at least in the near future. "The only hope is with the Karnataka project. If that succeeds, then the company may stay. But going by the pace in that state, that appears unlikely," said a source.

The company had signed MoUs with the Jharkhand and Orissa governments in 2005 and 2006, respectively, for setting of 12 MTPA steel plants with an estimated investment of Rs 40,000 crore each, and with the Karnataka government for setting up a 6 MTPA steel plant in 2010 with an investment of Rs 20,000 crore.