Group President, Group Managing Director & Editor In Chief: Dr.Shelly Ahmed

Wednesday, February 06, 2013

Why Posco Will Need A Miracle In Odisha?

The environmental clearance for the mega steel project is still missing and yes, there’s no MoU. It is being labelled the last battle in a war that is already in its eighth year. 

On Sunday, February 3, the Odisha government initiated a last ditch effort to acquire land for the mega steel plant proposed to be set up near the port town of Paradip in Odisha by Korean steel major Posco after a lapse of nearly a year-and-a-half. In a pre-dawn operation, twelve platoons of policemen swooped down on Gobindpur village, the last frontier in the long-drawn battle, and began demolishing betel vines after using lathis to disperse a crowd of a few hundred people, mostly women.

In a move designed to send out a message that the Naveen Patnaik government means business this time, two more platoons joined the force and machines were pressed into service to expedite demolition of betel vines by the third day of the ongoing land acquisition drive. “If required, we will send more forces to the area,” said a top official, who also let it be known that the government is determined to acquire ‘as much land as possible’ for the project in the next one month.

For the record, nearly 60 acres of land – out of the minimum of 700 acres of additional land that Posco says it needs to start work on the project – had been ‘freed from encroachment’ by the third day of the operation. [The government had already acquired about 2, 000 acres by the time that land acquisition had to be abandoned following stiff resistance by the local people in August 2011.]

The ‘unseemly’ hurry on the part of the state government has been attributed to two factors. First, state government officials would have to apprise the Indo-Korean Business Partnership meet scheduled for February 15 of the progress in land acquisition.  Second, land acquisition is going to become extremely difficult once the new Land Acquisition Act, with its stringent provisions, comes into effect – possibly during the forthcoming budget session of Parliament.

Opposition parties and activists have expressed surprise at the Odisha government’s determination to go ahead with the land acquisition process for the mega steel plant despite the fact that Posco does not have an environmental clearance for the project.

The environmental clearance given by the Ministry of Environment and Forests (MoEF) on January 31, 2011 was suspended by the National Green Tribunal (NGT) on March 30 last year. “In its order on the petition filed by us, the NGT had asked the MoEF to review the clearance given to Posco which the latter is yet to do. Thus, the company does not have an environmental clearance as of now,” points out social activist Prafulla Samantray, who was one of the petitioners against the clearance given to Posco.

“Forget environmental clearance. Posco does not even have a memorandum of understanding with the state government now. The one it had signed on July 22, 2005 lapsed on July 21, 2010 and no fresh MoU has been signed so far. So what is the basis on which the state is acquiring land for the project?” asks Ashok Sahu, vice president of the state unit of BJP, who led a party delegation to the trouble-torn Posco site on Tuesday to take stock of the situation there.

The absence of the MoU is important on two counts. First, the state government is believed to have serious reservations about the draft MoU submitted by Posco more than a year ago, especially about the clause providing for swapping of iron ore. Secondly, the state government has recently taken a policy decision not to give any ‘fresh’ assurance on raw material linkage to any industry, which would obviously apply to Posco as well.

With the state government’s decision to allocate the Khandadhar iron ore mines in Sundargarh district to Posco having been struck down by the Odisha High Court on grounds of ‘arbitrariness’, the Korean company does not have an assured supply of raw material for its steel plant, the capacity of which has been downscaled from 12 million ton per annum (MTPA) to 8 MTPA now.

To make matters worse, the sustained agitation by the Mahanadi Banchao Andolan (MBA) has put into serious question the government move to supply water to the project from River Mahanadi, the lifeline of the state.

Posco’s SEZ clearance too has run into rough weather with the Falta SEZ, the agency that gives the clearance, asking the state government to give a ‘timeline’ for the completion of the land acquisition process before the Korean company’s application for extension of its SEZ clearance can be taken up – something that the state government is no position to do given the uncertain situation on the ground.

Against this background, it is really surprising that the state government has gone out of its way to acquire land for a company that does not have an environmental clearance, SEZ clearance or even a MoU.

But Posco-watchers believe the latest government drive is nothing but tokenism aimed at showing the Centre (and the Korean government) that it is doing its best to get the long-delayed project going.

The reported assurance given by the Jagatsinghpur district administration to the people of Gobindpur on Wednesday that police force would be withdrawn from the place lends credence to this prognosis.

With Chief Minister Naveen Patnaik having already sounded the poll bugle, it would be foolish on the part of the BJD government to use force beyond a point. Hence, it has adopted a policy of ‘thus far and no farther’.

“There is no way work on the Posco project can begin – if it begins at all – in right earnest before the next Assembly elections due in 2014,” says a political observer.

Tokenism is what the CPI has also been accused of in the latest round.

There is none of the virulence and even violence seen in the earlier rounds in the current ‘showdown’ between anti-Posco activists led by Posco Pratirodh Sangram Samiti (PPSS), a CPI-backed outfit, and the district administration. PPSS leader Abhay Sahu and CPI MP from Jagatsinghpur Bibhuprasad Tarai sat on a dharna in Gobindpur village for sometime on Sunday, the first day of the latest land acquisition drive, even as demolition of betel vines went unhindered in police presence outside the village.

The softening of the CPI’ position is being attributed to the party’s keenness to have an alliance with the ruling party ahead of the next elections. There is talk of a ‘deal’ having been signed between the two sides during the national executive meet of the party in December last year.

While the gradual fizzling out of the movement against the project certainly augurs well for Posco, the company cannot be unaware of the heavy odds stacked up against it. In the event, it would be nothing short of a miracle if the plant is set up in the foreseeable future.
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