The Centre has asked the Orissa government to clear more forest land for setting up the long-delayed $12 billion (Rs54,000 crore) steel plant planned by South Korean manufacturer Posco Ltd.
The state government has until 30 April to submit a plan of action.
Orissa chief secretary A.K. Tripathi said a “forest diversion clearance,” which allows forest land to be transferred into non-forest use, will have to be first approved by the ministry of environment.
To compensate for the razing of more forests, the state government has to provide alternative land to the forest department and pay the same amount of money for its value and for reforestation, Tripathi said.
Since its announcement in 2005, the project has hit several roadblocks, from villagers’ protests to confusion over land rights to Posco’s inability to secure a mine lease.
The impasse over the acquisition of land by Posco, the world’s third-largest steel maker, is now being reviewed directly by the prime minister’s office to expedite the 12-million-tonne plant that represents the single-largest foreign investment in India.
Officials from Posco, state governments and the Centre, along with steel secretary R.S. Pande, met last week to discuss the project and come up with strategies on how Posco can secure an iron-ore mine lease to feed the proposed steel plant.
One prospect was a mine in Khandadhar, Orissa. But then government-owned Kudrem-ukh Iron Ore Co. staked a legal claim to those mining rights, and the matter has been tied up in courts. Last week’s discussions focused on how to better accommodate Posco’s investment in India, said Pande.
Posco initially requested 5,005 acres of land to build the steel plant and a captive port, 10km north of the port of Paradip. It subsequently settled for 4,004 acres to reduce potential displacement.
Of this revised area, about 3,556 acres are government land, while the rest is private. Initially, state officials assumed that only 843 acres of the government’s portion were forest land but then discovered more acres of forest would have to be razed to make way for the steel plant. This has led to a tussle between the state revenue and forestry departments.
So far, only 1,135 acres of the government land, which are free from encroachment, have been acquired. Posco has deposited Rs2.89 crore for the land, said a Posco India official who did not want to be named. Posco India, the Indian subsidiary of the steel giant, has invested Rs116 crore and is employing about 600 staff and contractors, this official said.
Work on the project was originally scheduled to start in April with the first phase to be completed by 2010.
Meanwhile, more protests over land rights are expected to pick up at the end of this week in Ranchi where nearly 5,000 people—including experts and displaced residents of the mineral-rich states of Jharkhand, Chhattisgarh and Orissa—are expected to rally.
Ekta Parishad, a member of the land reform advocacy group National Campaign Committee on Land, and several other grass-roots organizations will hold consultations and a rally between 24 March and 26 March in the Jharkhand state capital.
About 50 villagers from different parts of Orissa are expected to participate.
“The government is blindly following industrialization,” claimed Bharat Bhushan, convenor of Ekta Parishad in Orissa. “We oppose further displacement by dams, mines and industries and we want good rehabilitation packages for the displaced population.”
He said a handful of residents of Harirarpur village in Jagatsinghpur district, located near the Posco site, would attend but conceded that they are not as angered as villagers in other parts of India who are losing land to development.
“The least opposition is from Jagatsinghpur district because the company (Posco) has better policies and is offering employment,” Bhushan said. “The question is whether the promises will be kept.”
Bhushan said nearly five lakh people in the state have been displaced by industrialization and the government is yet to provide a rehabilitation package of up to Rs5 lakh.
“We want the local people to have a share in the industries coming up,” he said.