Posco India Pvt. Ltd, a subsidiary of the world’s fourth-largest steel producer Posco, has secured clearance from an expert committee of the ministry of environment and forests to start construction of a captive port in Orissa, a company official, who did not want to be identified, said.
A separate official at the Paradip Port Trust, a division of the shipping ministry that had been concerned about the coastal erosion resulting from Posco’s planned port, said the trust, along with Posco and Indian Oil Corp. Ltd (IOC), will build a 6.5km embankment to safeguard the coastline against high tide at an estimated cost of Rs34 crore.
“An in-principle decision has been taken to construct surge protection embankments,” he said, wanting not to be identified because he is not authorized to speak to the media.
However, IOC, which is building a Rs25,646 crore refinery at Paradip, located between the port trust’s operation site and Posco’s plant, confirmed the plan.
A blueprint of Posco’s planned project in Orissa
The ministry’s approval was given on the basis of an environmental impact study of the port conducted by the National Institute of Oceanography, Consulting Engineering Services India Ltd and Danish Hydraulic Institute.
The port, expected to be built near Nolia Sahi village in the state, forms part of the $12 billion (Rs49,200 crore) investment the South Korean steel firm plans to make to set up a 12 million tonne (mt) steel plant. The project represents the single-largest foreign investment in India and has been delayed for 10 months over land disputes and local opposition.
The planned port, on the mouth of the Jatahari river that flows into the Bay of Bengal, will be 3km long, with a capacity to handle 30mt of cargo.
“It will be used to handle Posco’s inbound and outbound cargo,” said the Posco official.
The steel project continues to face dissent over land and plans to clear forests for the plant site, and still must clear regulatory hurdles.
The proposed port similarly was derailed after concerns of coastal erosion were raised by Paradip Port Trust, located 10km north of Posco’s site.
Paradip Port, which handled 38mt of cargo and earned Rs550 crore in revenue in 2006, said the erosion threat would persist if Posco’s plant came up south of its establishment, unless embankments were made to cushion the impact.
The official said the coastline near Paradip experiences littoral movement of sand, which means that the sand travels northwards with choppy seas, but can be controlled.
Both Posco and Paradip Port Trust have informed the state government that the Pune-based Central Water Power Research Station will conduct a study to protect sand banks.
After a meeting between the Prime Minister’s Office and the state in March, the Orissa government was to submit a forest diversion plan to the environment ministry by 30 April.
Orissa initially cleared 4,004 acres for the Posco project, but discovered later that nearly 2,000 acres, and not the 843 acres originally believed, came under the forest department.
There is also a plan to redraw the project in order to take Dhinkia, the village that has posed the stiffest resistance, out of Posco’s plant site.
Posco had asked for a social and economic survey to be conducted at the site. Even that study has faced protests and has not been carried out. While there is no data available, a Posco official estimates the number of families that could be displaced by the project will reduce to between 200 and 500 if Dhinkia is excluded.
According to an IOC official at Paradip, the company is considering setting up a 9mt single-point mooring facility between the two ports of Paradip and Posco. The plan is to embark its vessels within the limits of Paradip Port, which in turn will earn revenue for handling charges from the oil company.