Arkansas lawmakers are still reviewing a proposal to provide a steel company state financing to build a $1.1 billion steel mill in Osceola.
The Legislature's economic development committees convened a special meeting Monday, after two reports released by consultants last week offered mixed opinions of the costs and benefits of the Big River Steel project.
One independent consulting firm noted Gov. Mike Beebe's incentive package, which would provide Big River Steel with $125 million in state financing to build the mill, would erode some of the economic benefits the state would receive from the project.
In an interview with Talk Business Arkansas, Grant Tennille with the Arkansas Economic Development Commission said the proposal has risks, but there are appropriate provisions in the deal to protect Arkansas.
“The state has put appropriate clawback and penalty provisions into its agreement,” said Tennille. “If everything goes badly in the marketplace, then the steel mill is not likely to return everything it should to the state. But if the mill doesn’t perform the way it’s supposed to perform then the state has the ability to ask for and receive its money back.”
Tennille says Big River Steel’s plan to target areas of the steel market that are growing, where there’s demand, and where there’s not as much supply in the United States; is going to provide real opportunity.
Lawmakers are expected to ask even more questions after a second consultant report revealed state economic development officials overestimated the long-term benefits of the project and didn't consider uncertainties surrounding the project.