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Orissa: A jinxed state for mega projects?

Last updated on: September 13, 2010 08:52 IST

Orissa: A jinxed state for mega projects?

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It is raining mega investment in Orissa, but none of the big ticket projects have made any headway hitting the land acquisition, environmental clearance and sundry other hurdles.

South Korean steel major Posco's   51,000-crore (  510 billion) project, Vedanta's   5,000 crore (  50 billion) mining venture and Tata Steel and ArcelorMittal's   15,400 crore (  154 billion) and   40,000 crore (  400 billion) projects respectively are some of the mega proposals, which are still-born.

"At present, we have over   400,000 crore (  4 trillion) of committed investments in various stages of implementation," Chief Minister Naveen Patnaik said.

He, however, did not mention the remaining   200,000 crore (  2 trillion) investment for which foreign and domestic investors were making a beeline.

Posco's 12 mtpa mega steel mill at an investment of   51,000 crore (  510 billion) has been hanging fire for the last five years in the absence of land arrangement by the state government.

Similar is the case of ArcelorMittal who proposed to set up a greenfield steel plant with the capacity of 12 million tonnes per annum.

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Image: The Wheel of Konark, Orissa.

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In both the cases, fierce resistance to land acquisition, procedural bottlenecks and legal and mining issues have come in the way of their implementation.

"Mega projects could not be set up overnight. One has to have patience for their implementation, as the state is gradually opening up to environment protection," reasoned Industries and Steel and Mines Minister Raghunath Mohanty.

Mohanty, however, claimed that of the 50 MoUs signed in the steel sector, 29 units have already reached different stages of production while others in small and medium scale would come up soon.

Similarly, one aluminium and one cement company have already commissioned commercial production he said, claiming that roadblocks were being gradually cleared for the Posco project.

"The state government had recently acquired about 1,000 acres of land for housing Posco's mega steel mill near Paradip for which 4,000 acres is needed," he said.

The state has till date signed 86 MoUs including 50 for steel units, 27 for thermal power projects, four for alumina-aluminium units and six for ports.

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Image: Protesting tribals.
Photographs: Reuters
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Land acquisition has emerged as the major hurdle before industrialisation, pointed out a senior official at the industries department.

He said of the 45,607 acres of land required for the 86 MoU signed companies, only 15,000 acre had so far been be acquired.

Posco, whose project is billed as the biggest foreign direct investment in India, had signed a MoU with the state government on June 22, 2005 to set up a steel mill, a mining project and a captive port facility.

Five years on, the steel behemoth failed to make any progress in any of the sectors stuck in procedural bottlenecks, relating to forest and environment clearance and permission for mining activities.

"It is a piquant situation. Villagers will not sacrifice their fertile land for the steel plant, as they earn their livelihood from the forest land," Posco Pratirodh Sangram Samiti president Abhay Sahu said.

PPSS has been demanding shifting of Posco's plant site, while both the company and the state government are adamant on not budging from the earmarked land, causing little progress in the project, an industry department official said.

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Image: Posco too faced protests from the locals.
Photographs: Reuters
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Similarly, Posco's bid to get prospecting license over the iron rich Khandadhar mines was embroiled in a legal battle with other contenders. The case has moved to the Orissa high court.

"This apart, forest clearance for the project is emerging as a major hurdle before us. The Union Ministry of Environment and Forest had already stopped all project-related activities acting on the Saxena Committee recommendations," pointed out a senior Posco official.

Forest land comprised about 2,900 acres in the proposed Posco site spread over about 4,004 acres. The vast forest area is occupied and used by people for various activities, including betel cultivation.

London-based Vedanta Group's   5,000-crore (  50 billion) mining project is on a stickier wicket.

After being denied permission to start mining at Niyamgiri hills in Kalahandi district on the charge of violation of the Forest Rights Act, Forest Conservation Act and Environment Protection Act, the company has stopped its expansion project.

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Vedanta's refinery at Lanjigargh, which runs on bauxite imported from other states with the hope of getting raw material linkage locally, has already retrenched some workers.

"What is the point in undertaking expansion activities when the state government cannot arrange for minimum raw material required to run the refinery," a senior Vedanta Group executive said.

Tata Steel is yet to set up its 6 mtpa steel mill at Kalinga Nagar in Jajpur district due to resistance from the locals.

Similar is the situation for other mega projects in steel and aluminium sectors besides, some independent power plants and port projects.

"Unless there is an industry-friendly attitude, it may be difficult to set up any major project in the state," Sourav Garg, Principal Secretary in the Orissa Industry Department, regretted.


Image: Eefinery at Lanjigarh.
Photographs: Courtesy, Survival International
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