The Orissa government has decided to drop the plan to provide special economic zone (SEZ) status to Kalinganagar, where several tribals protesting land acquisition were killed in police firing in January 2006.
The state had received 17 proposals from various industrial houses for setting up SEZs in the state and the Centre had approved 13 of them.
"We have decided to drop one of them," state Industry Minister Biswabhusan Harichandan told the state assembly on Wednesday.
"We have dropped an SEZ spread over 250 acres for metallurgy-based engineering and downstream industries at Kalinganagar for the time being," Harichandan said.
The area forms a part of the Kalinganagar industrial complex in Jajpur district, around 120 km from here, which is billed as one of the biggest steel clusters of the country, an official of the state industry department told IANS.
Jindal Stainless Steel Ltd (JSSL), which is setting up a huge integrated stainless steel plant in the region, had sought this SEZ status, said Jajpur District Collector Arabinda Padhi.
Several companies like the Jindals and the Tatas had proposed to set up projects at the Kalinganagar complex.
The area became a "fear zone" after 13 tribals were killed and several injured in police firing Jan 2, 2006, when they gathered to protest the construction of a boundary wall of a Tata Steel plant.
The industry department official declined to reveal the cause behind the dropping of the SEZ at Kalinganagar.
An industry analyst, however, said that the stiff opposition to industrial projects in the area, and the recent violence in Singur and Nandigram in neighbouring West Bengal, may have prompted the government to drop the plan for the time being to avoid further trouble.