Tata Steel to start work on Orissa plant

Written by Reuters | Bhubaneshwar, August 31: | Updated: Aug 31 2007, 21:37pm hrs
Tata Steel Ltd, the world's sixth-largest steelmaker, will start construction work at its proposed 6 million tonne steel plant in Orissa in November, its Managing Director said.

Tata Steel signed an accord with the state government of Orissa in 2004 to build a steel plant at the Kalinga Nagar Industrial Complex. The project has been dogged by protests over the compulsory acquisition of land to build it on.

"We will start construction in November this year," Managing Director B. Muthuraman told reporters late on Thursday in Bhubaneswar after meeting the state's chief minister.

"We have asked for iron ore mines from Orissa government and hope to get it soon," Muthuraman said.

A senior state government official said authorities were not yet considering the Tata Steel's application, and said other companies were also interested in the mines.

"Their application for mining lease is still pending with us. We will consider it only when they fulfil the clauses of the MOU (memorandum of understanding) agreement," N.K. Nayak, joint secretary in the state's mining department, said, without elaborating on what Tata Steel needed to do.

"There are several other companies in line for the same mines," he said.

Muthuraman said Tata Steel has already placed equipment orders worth 45 billion rupees for the project.

The state government has allotted around 2,000 acres of land for the project, but the issue of acquiring farmland for factories has become a controversial one as industrialisation gathers pace in eastern India.

Muthuraman said so far 620 families had moved from the site and the company needed to shift a total of 1,200 families.

Saying they were kicked off their land without proper compensation, tribes clashed with police last year. In January 2006, 13 people were shot and killed by police during a protest against the plant.

At 0730 GMT, shares in Tata Steel were 3.1 per cent higher at 677.50 rupees in a Mumbai market that was up 1.4 per cent.