Odisha government proposes fresh agreement to expedite POSCO steel plant

People protesting land acquisition for the project say they will intensify stir

By T N Vijayalakshmi
Published: Saturday 31 March 2012

The Odisha government is now preparing a new legal framework to expedite South Korean company POSCO's mega steel project in Jagatsinghpur district of Odisha. The project has been held up the past few years because of the ongoing people's struggle against the project, touted as one of the biggest foreign direct investments.
The state government is contemplating a tripartite agreement involving parent company POSCO, its Indian concern POSCO India Limited and the state government. The move became necessary because the memorandum of understanding (MoU) signed between the state and the steel company in 2005 lapsed in 2010. Fifty-five per cent of land earmarked for the project is yet to be acquired and the state government has been criticised for attempting land acquisition after expiry of MoU.

“All the three parties will have to sign the agreement. The instrument may contain the details of revised clauses or new additions with a provision that the clauses not specifically revised will remain as such as provided in the original MoU,” says a senior official of the Steel and Mines department of the state.

Legal cushion

The decision on a new agreement was taken at a high level meeting chaired by chief secretary Bijay Kumar Patnaik recently. Though a revised MoU draft was prepared by incorporating a clause of employment for local people and another clause for promotion of ancillary and downstream industries, the government decided not to renew the existing agreement in view of the opinion given by the state law department. It said that on expiry of the period of validity of an MoU or agreement, its extension may not be possible. “Extension is made prospectively before expiry of the original MoU or agreement,” the law department noted in its opinion.

The proposed tripartite agreement would seek further time for establishing the project.

During his recent tour to South Korea, prime minister Manmohan Singh assured that the POSCO project was safe. However, the project again hit a rough patch when a bench of the National Green Tribunal, comprising Justice CV Ramulu and expert member Devendra Kumar, suspended the final environmental clearance granted to the company.
Last year, the state government had pushed hard to acquire land in Noliasahi, Bhuyanpal, Polanga, Bayannal Kandha and Nuagaon villages. In fact, the Jagatsinghpur district administration claimed to have acquired about 809.3 hectares (ha) of land by pulling down betel vineyards and felling standing trees.

POSCO India Limited says it can start land development for the first and second phase of the project by this year end if it gets 1,093 ha (two-third) of the total project area of 1,620 ha. Operation of the first phase 4 million tonne per annum (MTPA) steel plant can begin in 2016, says the company.

The MoU with POSCO India Limited on June 22, 2005 was for a 12 MTPA integrated steel plant along with a captive minor port at Jatadhari Muhan near Paradip port at an estimated cost of Rs 51,000 crore. The company, in July 2010, requested for extension of the validity of the MoU for another five years.

The Odisha Industrial Infrastructure Development Corporation (IDCO), a state government undertaking, was entrusted with the responsibility of acquiring 1,620 ha land for the project.

However, people protesting the mega project seem to be encouraged by a series of recent developments such as green tribunal’s rejection of EC and report of Comptroller Auditor General that pointed out misuse of the Land Acquisition Act for the project. Prashant Paikray, spokesperson for the Posco Pratirodh Sangram Samiti, which is spearheading people's protests against land acquisition for the project, says the agitation will be intensified.  

According to detailed survey conducted by the district administration, 718 families from six villages are to be displaced for the project. Besides, 1,877 persons would lose their lucrative betel farms, 31 prawn ponds will be levelled and 1,075 fruit bearing trees would be felled.

With regard to mineral linkage for the project, the state government had recommended to the Centre in January 2009 to accord prior approval for grant of prospective license for iron ore in favour of POSCO India Limited over an area of 2,500 ha in Khandadhar Pahar area in the district of Sundargarh.

This was challenged in the Odisha High Court by other companies. The court set aside the recommendation of state government. All the parties have filed special leave petition in the Supreme Court and the matter is now sub judice.




Subscribe to Daily Newsletter :
Related Stories
Related Blogs

Comments are moderated and will be published only after the site moderator’s approval. Please use a genuine email ID and provide your name. Selected comments may also be used in the ‘Letters’ section of the Down To Earth print edition.