In a development that could shelve the proposed ₹35,000 crore joint venture between JSW Steel and South Korean major POSCO, the Dhenkanal District Collector has issued a notice to Odisha’s land acquisition authority, IDCO, seeking clarification on the status of nearly 400 acres of land, about half of the total parcel, leased to Saffron Resources Pvt Ltd. The notice asks why this portion of land should not be cancelled in view of alleged violations of lease conditions.
The notice, issued last week, follows a petition submitted by an association of original landholders from Khadagprasad and Kurundi villages. The petition highlights concerns around compliance with lease terms and seeks a review of the transfer process.
The land in question is part of a larger 900-acre parcel that changed hands following an e-auction process in 2023. Saffron Resources Pvt Ltd, a shell company registered in Cuttack in 2014, emerged as the “successful bidder”, acquiring the land for approximately ₹92 crore—translating to roughly ₹10 lakh per acre. This valuation has since drawn attention, as local estimates place the prevailing market rate significantly higher.
A portion of this land includes leased areas originally acquired by IDCO from villagers between 2006 and 2007 for an earlier industrial project proposed by Lanco, which did not materialise. Since May 2023, the land has been under the control of Saffron Resources. Subsequently, towards the end of 2025, JSW Steel acquired the company, valuing the land parcel at around ₹700 crore.
In the four months that followed, Saffron Resources, now a wholly owned subsidiary of JSW Steel—was converted into a 50:50 joint venture between JSW Steel and POSCO. This effectively brought the land under joint ownership as part of the proposed steel project.
The villagers’ petition raises questions regarding the sequence of these transactions and whether the conditions tied to the land allotment have been met.
Advocate Lalitendu Mishra, representing the villagers and original landowners, said that the petition seeks enforcement of the conditions under which the land was allotted by IDCO on lease to Saffron. “As per the agreement, certain development milestones were to be achieved within a stipulated timeframe. We have requested the authorities to examine whether those conditions have been fulfilled,” he said.
He further noted that the outcome of the review could influence the future of the proposed project, particularly if any portion of the land is found to be non-compliant with lease terms. The petitioners have also sought to buyback the land because the purpose for which it was originally allotted had not been met.
In April 2026, JSW Steel and POSCO had announced plans to set up a 6 million tonne steel plant at the site, positioning it as a significant industrial investment in the region. However, sections of the local community have expressed reservations, including a proposal to repurchase the land originally acquired from them nearly two decades ago, with appropriate financial adjustments.
The situation traces its origins to 2006, when land was acquired from farmers in Dhenkanal district at rates ranging between ₹3–6 lakh per acre. At the time, the project was presented as a driver of industrial growth, with assurances of employment and economic development. While initial construction activity did provide temporary opportunities, the project remained incomplete.
In 2018, Lanco entered liquidation proceedings under the National Company Law Tribunal (NCLT), setting in motion a series of developments that eventually led to the e-auction of the land. The subsequent acquisition by Saffron Resources, and later by JSW Steel, has drawn scrutiny from some stakeholders regarding valuation and process.
There have also been broader concerns raised by local stakeholders and observers, including questions around potential revenue implications for the exchequer and outstanding dues claimed by contractors linked to the earlier project. Additionally, the project’s proximity to the Brahmani River has led to discussions around environmental compliance, particularly in relation to prescribed buffer norms.
As the matter now comes under administrative review, the Collector’s notice marks an important step in examining these concerns. The outcome is likely to provide greater clarity on the status of the land and the way forward for the proposed industrial development, while also addressing the issues raised by affected communities.
