The $ 12-billion Posco project in Orissa may have reached a dead-end. Posco India chief Soung-sik Cho has said that the project makes no business sense without a mining lease and senior state government officials have made it obvious that they are willing to let go of the project.
?We would in no way allow a Nandigram or Kalinga Nagar-like bloodbath for the Posco project. We would not repeat those mistakes. We would rather let the project go or shift it from its present site,? senior Orissa government officials told FE.
?The politically biased society here is posing lots of hurdles in setting up the steel plant and has resulted in a delay of more than a year,? said Soung-sik Cho to FE. ?We, however, do not intend to withdraw unless asked to leave. Both the governments (the Centre and the state) are trying their best to see that this biggest foreign direct investment goes through.?
The dispute over mines may provide the Naveen Patnaik led Orissa government the excuse to shelve the project, wracked with agitations for more than two years from local villagers who refused to give up land for the SEZ.
Asked if the company would still go ahead with the project if mines were not allocated, Soung-sik said, ?It is not likely to happen. Without mines, there is no reason to come to India, and it is not a viable proposition to set up a plant here then.?
An assured supply of iron ore would compensate for problems such as poor infrastructure, communication, power and problems relating to land acquisition, he added.
While the Orissa government is still making a last-ditch attempt to save the project by convincing locals about its benefits and also renegotiating the rehabilitation package with them, it is more hopeful about the other mega project, the $9 billion ArcelorMittal steel project. Officials said the project is on course for which land would be acquired in Keonjhar district of the state.
To avoid a Posco-like situation, the officials of ArcelorMittal are talking to the local inhabitants before the land acquiring exercise begins. ?The company officials are currently mobilising grassroots feedback for the project,?? said the government official.
Land acquisition for the Posco plant has been the biggest hurdle for the Rs 47,000-crore. It needs 4,004 acres of which only 300 acres are agricultural land. ?There is actually no agriculture happening on 300 acres,? said a company official.
The company had also claimed that of the eight villages where land was needed to be acquired, seven had signed up. But the heightened political sensitivity in a pre-election year means even that one pocket of resistance is a potential flashpoint. ?No way would we allow violence. It (the project) would not be at the cost of the people. Unlike Nandigram, there is no communication deadlock with the locals for acquiring the necessary land,? said another government official.