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Centre and Orissa try to resolve delays in Posco steel, other deals

Centre and Orissa try to resolve delays in Posco steel, other deals
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First Published: Fri, Apr 20 2007. 12 28 AM IST
Updated: Fri, Apr 20 2007. 12 28 AM IST
At a summit between the Centre and Orissa state government officials, the Union government vowed to help expedite steel and power investors’ entry into the state with measures such as easing restrictions on land and forest use.
Chief minister Naveen Patnaik met Prime Minister Manmohan Singh to try and lift some of the stumbling blocks that have delayed billions of dollars in investment, including a $12 billion (Rs50,400 crore) proposed plant from steel giant Posco that represents the single-largest foreign investment into India.
Posco dominated the meeting’s agenda, but the politicians also touched on other infrastructure issues in the state. Investment proposals in the state total Rs4,00,000 crore.
“I am optimistic,” said Patnaik soon after the meeting. “Projects are moving ahead and the Centre promised to expedite it.”
Posco has struggled to secure a mine lease for iron ore. While the state government proposed the name of Khandadhar mines, the Centre-owned Kudremukh Iron Ore Co started legal proceedings claiming first rights over the mines. The Orissa high court this week referred the matter to the Centre, asking it to take a decision within three months.
Posco also needs land to build the 12-tonne plant and has faced resistance from local villagers. There have also been delays in receiving the necessary permits to convert forest land for industrial use.
State officials asked the Centre to share a portion of revenues derived from a new tax on exports of minerals such as iron ore; it also demanded allotment of coal blocks for its proposed power plants. The state has signed 13 memoranda of understanding (MoUs) to add 16,900MW of power, investments that total Rs70,000 crore. It has signed three Rs27,626 crore deals with Larsen & Toubro, the Aditya Birla Group and Vedanta Alumina Ltd for alumina plants.
The Prime Minister has assured the state of coal blocks for power plants.
Finance minister P. Chidambaram, who was in the meeting, said he believes in sharing revenues from export duty with the states, according to a senior state official who didn’t want to be named.
With the growing troubles over acquisition of land across the country, Patnaik said the displaced villagers will be handled “humanely”.
In Orissa, the Centre has signed 46 MoUs with steel producers, together worth Rs1.87 lakh crore.
Delays also stem from a quarrel between the government and the Supreme Court over who should sit on the Forest Advisory Committee, the main body that clears forest diversion plans. The committee that assists the Supreme Court on forest matters has objected to the names of members suggested by the Centre; the court has stayed its appointment.
Land acquisition for at least 15 new proposals, including Posco, and 11 temporary working mining permits have stalled in Orissa because the forest committee hasn’t met for eight months.
Meanwhile, local activists continue to build bamboo and human barriers in Dhinkia village, one of the eight villages at the Posco site.
Officials have been barred entry, and no socioeconomic study or topographical survey has been carried out yet due to the local opposition. According to one state official, villagers refused to participate in the recent panchayat election because of issues over development.
The government now plans to exclude Dhinkia from the proposed site, mainly populated by betel farmers. There are also plans to deploy policewomen in the village outposts to handle women and child protesters.
“Historically, the people of the area are peaceful,” he added, saying that these problems can be overcome with tact. “The history of Posco in India cannot begin with violence,” he said.
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First Published: Fri, Apr 20 2007. 12 28 AM IST