Dayton issues warning to Essar about paying companies working on Nashwauk site – by John Myers (Duluth News Tribune – November 30, 2015)

Gov. Mark Dayton on Monday pledged to play hardball with Essar Steel Minnesota, saying he’ll call the state’s $67 million loan to the company on Wednesday if Essar doesn’t pay past-due bills from local construction companies.

Essar has essentially been in default on the state money since October because it failed to live up to an agreement to create jobs at an iron and steelmaking facility in Nashwauk by that date.

The company has moved ahead with work building a taconite plant at the Nashwauk site, but has shelved plans to make iron and steel at the site.

That puts the company in violation of the 2007 agreement signed when the economic development money was awarded by the state.

Essar for years has been dogged by allegations and legal action for not paying its bills in a timely fashion, something the governor has said is unacceptable in Minnesota.

In a statement released Monday, Dayton said he spoke by phone with Madhu Vuppuluri, president and CEO of Essar Steel Minnesota, on Nov. 25. Dayton said he informed Vuppuluri that if the company does not pay its Minnesota vendors by close of business on Wednesday, Dayton will “call the state’s loan and demand its immediate repayment.”

Later Monday, Dayton said he offered Essar a reprieve through Friday if Vuppuluri promised that payment would come by the end of the week, but said he had not yet received a commitment from the company.

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