Orissa CM takes Posco battle into enemy camp

Bhubaneswar, Aug 4 | Updated: Aug 5 2005, 05:30am hrs
Orissa chief minister Naveen Patnaik strongly defended the concessions given to the South Korean steel major, Posco, for setting up the 12 million tonne steel project in the state. He said that those who were opposing it are only serving the interest of a handful of mine owners.

Taking the battle into the opposition Congress camp, Mr Patnaik said on Wednesday, It is their United Progressive Alliance government which has endorsed the project.

Reading out a letter from the government of India, he said The UPA government has told us to create investor friendly climate in the state and cautioned not to put any unnecessary conditions which would create hurdles in the flow of the foreign direct investment (FDI) proposal of Posco.

The Central acts and policies are very clear that 100% FDI can come into the mining sector and the investor is free to sell its minerals anywhere in the world subject to the export-import policy of the country. But, he added, the state government has adhered to its policy of value addition and convinced the South Korean company to set up a steel plant in Orissa.

The CM was speaking in state assembly on Wednesday intervening in a discussion on the motion Orissa Mines and Mineral Policy and the MoU with Posco by the state government.

Poscos 12-billion dollar FDI is the largest in the country and the investment is the biggest in the world in 2005. Projects of this scale will come to Orissa only when they get raw materials at a reasonable price otherwise they will go to the neighbouring states, he said adding that states like West Bengal and Jharkhand are wooing Posco.

Referring to the opposition Congress demand that iron ore should be supplied to Posco at market rate instead of leasing mines for captive purpose, the chief minister said that only mine owners will be benefited if Posco was asked to source raw material at market rate.

Referring to the previous JB Patnaik regime, he said mining leases were given for export purpose. For decades million tonnes of iron ore had been going out of our state. The leader of the Opposition (JB Patnaik), who was chief minister of the state for nearly a decade and a half, knows it better, he said, taking a dig at some of the Congress leaders who are in the iron ore export business.

On Poscos proposal for swapping of iron ore, Mr Patnaik said the companys technology requires blending of iron ore to reduce the alumina content in the raw material. He said swapping is an expensive proposal as it would increase the raw material price by Rs 1300 per tonne. However, Posco will take a final decision on the issue only after knowing the quality of iron ore following prospecting in the mines area. u

The chief minister said the value addition policy would help to industrialise the state. Industrialisation will generate job opportunities and increase the states revenue base. Because of the state governments transparent policy and initiative in industrialisation, steel clusters are coming up at Kalinga Nagar Industrial Complex near Dubri, Paradip and Jharsuguda-Sambalpur region, and alumina and aluminium projects are being set up in undivided Koraput and Kalahandi districts.

New ports are sprouting at Dhamra, Paradip and Gopalpur. These projects, which would entail an investment of Rs 1.08 lakh crore, would generate lakhs of jobs and crores in revenue for the state.

People will look at Orissa as a haven for industries, he said, adding that in the coming months Orissa would become a premier state.