The two projects were treated as one in the memorandum of understanding signed between the company and the government.

Posco, one of the world's biggest steel makers, signed the deal with the state government in June 2005 to set up the plant near the port town of Paradeep in the coastal district of Jagatsinghpur, some 100 km from here by 2016.

There has been no significant progress on the project, the largest foreign direct investment in India, since then due to local opposition.

Over 20,000 people from around 15 villages, including Dhinkia, Gada Kujanga and Nuagaon, are protesting the project, saying it will displace them and ruin their betel leaf farming.