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Following is Samaja’s report on this.

The following article from Samaja explains why people in Orissa (and India) do not believe companies’ promises. If what the article says is true it is shameful on the part of Tatas to behave that way.

Following are some excerpts from a PTI report in Economic Times.

Setting at rest speculation on the fate of its Rs 52,000 crore steel project, South Korean giant Posco has decided to begin construction work on the 12 million tonne plant in Orissa by October.

“We will begin construction work of our 12 MT project in Orissa’s Jagatsinghpur district by October on whatever land we have acquired so far,” Posco India Chairman and Managing Director Soung Sik Cho said. …

“We believe things have undergone a sea-change during the last few months. People are clearly convinced that they will benefit from the project. Now they have a better understanding of the entire situation,” he reasoned.

Posco was also enthused after the union government gave environmental approval to the project. Moreover, the Naveen Patnaik government in Orissa has been asked by the Centre to take the mega investment process forward.

“Actually things are now looking much brighter. We have also received the official nod for our captive port project at Jatadhari, which has also encouraged us,” Cho pointed out.

The Korean steel giant has decided to begin construction work initially on 400 acres of non-forest land, and then on the revenue land to be given to it by the Orissa government.

“Now the only issue remains to be resolved is granting captive iron ore mines to us. But here also I believe things are moving in the right direction,” Cho said.

Following are excerpts from an Economic Times report.

Siemens Ltd on Friday said it has bagged an order from Jindal Stainless (JSL) to carry out installation related work for latter’s greenfield plant in Orissa.

The company has bagged the order along with Siemens VAI, a division of the Siemens Group Industrial Solutions and Services (I&S), Siemens Ltd said in a communique to the BSE. However, it did not divulge any financial details.

“It (the order) was bagged on the basis of our ability to come up with a fully integrated solution and our track record in executing project in the metals sector,” Siemens Ltd Executive Vice-President (Industrial Services and Solutions Division) N Sivasubramanian said.

As per the contract, Siemens would undertake plant layout for the hot-strip mill and equip it with latest tools. Production is scheduled to start in 2009.

JSL already has an operating plant at Hisar in Haryana and the new plant would be set up at Kainganagar Durubi Duburi in Orissa as part of its expansion plans.

Siemens would also provide customer training, monitor installation of all the components and systems as well as commission the installation, including fine adjustment of the technological models and control systems. The plant would be designed to produce 1.6 million tons of stainless steel strips in the first phase, Siemens added.

The plan for this was mentioned earlier. Following are excerpts from an Economic Times report.

Visa Steel on Friday inked a joint venture agreement with China’s Baosteel Trading and VISA Comtrade of Switzerland for setting up a 1 lakh tonne-per-annum ferro chrome plant in Orissa at a capital outlay of Rs 260 crore.

The JV company, VISA BAO, will be a subsidiary of VISA Steel which will hold a 51% stake. Baosteel Trading and VISA Comtrade will hold 35% and 14% stakes, respectively.  …

Times of India mentioned that 

Orissa government has asked the Arcelor-Mittal group to reassess the land requirement for its proposed greenfield steel project in Keonjhar district.

A similar report was also published in Business Standard saying that

Worried over the resistance of the people to land acquisition and allegations of land grabbing by industrial houses in the name of setting up industries, the Orissa government intends to make realistic assessment of the land requirement of various industries interested in setting up manufacturing facilities in the state. In the process, the government has decided to take a re-look at Arcelor-Mittal’s land requirement for its proposed 12 million-tonne-per-annum steel plant in Keonjhar district’s Patna Tehsil. This follows a presentation by the company to the state industry department officials on the project.

The company has sought 8,000 acres for the project, which includes land for construction of a 750MW captive power plant and a civil township. However, all indications are that only a ‘reasonable’ piece of land will be given to the company.

Earlier we reported on a news item on this in an English media. Following is Samaja’s take on this.

The Hindu reports that environmental clearance has been granted to POSCO steel plant. POSCO has earmarked 1,525 crores for environmental pollution control as per the Ministry of Environment and Forests (MOEF) as well as the state government conditions. Excerpts:

“The Ministry of Environment and Forests has given the environmental clearance for Posco’s mega steel project at Kujang near Paradip in Jagatsinghpur district of Orissa,” highly-placed official sources said.The Korean steel giant had signed a Memorandum of Understanding with the Orissa government in June 2005 pledging an investment of Rs 52,000 crore for setting up the plant.

“The project authorities shall utilise Rs 1,525 crore earmarked for environmental pollution control measures judiciously to implement the conditions stipulated by the Ministry of Environment and Forests (MOEF) as well as the state government. The funds so provided shall not be diverted for any other purpose,” a source quoted the Environment and Forests Ministry as saying, while granting clearance.

The clearance has been granted to the world’s third largest steel manufacturer for installing furnaces using FINEX technology only and on the condition that gaseous emissions from its various units should strictly conform to load/mass based standards notified by the government.

Earlier in April, the MOEF had granted its approval under Coastal Regulation Zone to the Korean steel giant’s proposal to set up a captive port at Jatadhari at a cost of Rs 17,113 crore.”

Hindustan Times and others report on this. Following are some excerpts from the Hindustan Times report.

Steel baron Lakshmi Mittal’s global giant Arcelor Mittal is planning to advance the construction at its 10 million tonnes (MT) Orissa plant and hopes to begin initial construction by mid-2008, as against the earlier date of 2009. …

The first phase of Arcelor Mittal’s plant in Orissa, with a capacity of six million tonnes, is likely to be commissioned by 2011.

The company has appointed Dastur & Co to carry out a detailed project report and environment management plan for the two sites, which are currently underway. Chief Executive Officer of Mittal Steel India Ltd, Sanak Mishra, said that major construction work in the site will be taken up in 2009 and the company has finalised the product mix of the proposed plant for both long and flat products.

Economic times reports that Orissa based company Scan steel is tying up with Delhi based steel major ‘AISCO’ for production and marketing under brand name ‘AISCO TMT’.

Perhaps, Industries in Orissa should learn to develop their own brands. Excerpts:

‘Delhi based steel company, AISCO and Orissa based SCAN Steel Group have tied up to undertake production and marketing of Steel TMT Bars under the brand name of AISCO TMT.The Group will take on the process of reduction of iron ore, making of sponge iron and casting of billets at its fully integrated facility at Orissa.

TMT Production will be undertaken at its main rolling unit at Orissa and various other group-owned and conversion units located at various parts of the country.

According to Mr. Praveen Aggarwal, Managing Director of AISCO Group, this will help them move towards overall growth of the company and the group will provide quality material for use in construction Industry and educate the consumers about shortcomings of poor quality steel available in the market.’

Economic times reports that Some Punjab based industries plan to invest in Orissa.
The reports state that Arti Steel has already invested 450 crore out of a total investment of 900 crores. The first step in Auto parts investment is being planned with GNA Axle.

Even Hero Honda , bicycle manufacturer plans to invest in Orissa. Hopefully, this will be the start of a trend. Excerpts:

“Orissa’s rich natural resources are now luring the industries in Punjab, with the an auto parts maker and steel manufacturer committing separate investments to the tune of Rs 960 crore to the state.

While Ludhiana-based Aarti Steels had committed an investment of Rs 900 crore for setting up a half-a-million capacity steel unit in the state, Goraya-based auto parts manufacturer GNA Axle Group will invest Rs 60 crore for manufacturing axle shafts, gears for heavy vehicles.

Leading bicyle maker Hero Cycles is also quite keen on exploring the possibility of making an investment in Orissa.

“We have proposed to invest Rs 60 crore within the next four years in order to set up an auto component manufacturing unit which will cater to export as well as domestic markets,” GNA Axle Group Director Randeep Singh said.

The Orissa government has promised to make available 100 acres of freehold land to the company at a token amount of Rs 2 lakh per acre. In addition to it, the government has also offered power at a rate of Rs 2.90 per unit without excise duty.

“We set up our unit in March 2003 in Orissa after carrying out a survey. The state can offer many benefits in the shape of availability of raw material for steel producing unit like us. So far, we have invested Rs 450 crore in this project while balance will be invested soon,” said Aarti Steels Director Rajeev Mittal.

The unit is is expected to be completed next year, he added.

“In Orissa, besides getting cheap power, we will also be in a position to get raw material at a much cheaper rate as we will be nearer to the source of raw material,” reasoned Singh while adding that with this new unit, our freight cost would also get reduced significantly for supplying our finished products to domestic as export markets.

Leading bicycle company Hero Cycles is also quite keen on exploring the possibility of making an investment in Orissa. “We will certainly explore the possibility of investing in that state which is full of natural resources,” Hero Cycles, Director Vijay Munjal said.

Recently, a high powered delegation including Commissioner-cum-secretary, Department of Industries, Orissa, was in Punjab for inviting industrialists to tap the investment opportunities here.“

Following is an excerpt from Deepika Global’s report on this.

(UNI) The National Aluminium Company Ltd (NALCO), …, has achieved a net profit of Rs 446.66 crore for the first quarter ended June 2007.

According to the unaudited financial results for the 3-month period of the financial year 2007-08 taken on record in the Board of Directors meeting held in New Delhi today, the company achieved a net profit of Rs 446.66 crore, with a sales turnover of Rs.1287.12 crore.

However, during the first quarter of previous fiscal, the figures were up at Rs 622.30 crore and Rs 1620.82 crore respectively.

The company also achieved higher alumina production of 3,87,800 tonne compared to 3,58,100 tonne in the first quarter of the previous year.

Following are excerpts from a Pragativadi report:

The Indian Metals & Ferro Alloys Ltd (IMFA) has posted its highest-ever turnover of Rs 593.53 crore during 2006-07, registering an increase of 26.67 per cent over the previous year.

… the turnover included export earnings of Rs 317.74 crore, that went up by 48.52 percent. The improved operational performance, coupled with higher product prices, resulted in PBIDT increasing by 45.48 per cent to Rs 140.53 crore.

… the company produced a record 130,563 tonnes of ferro chrome during the year, including the tonnage sourced under a conversion contract with an associate company as it shifted focus away from ferro silicon, the output of which declined by 19.39 percent to 30,796 tonnes.

… financial closure had been achieved for a 30 MW dual-fuel power plant at Choudwar that is expected to be operational in 18 months. This will take total power generation capacity to 138 MW, …

Business standard reports that some of the betel cultivators have accepted POSCO’s compensation for these Betel farms.

Also, It must be noted, that these Betel cultivation was being done in Govt. enroached land. Currently out of 4004 acres required by POSCO, 3567 acres is Govt. land and 438 acres is pvt. land.

Excerpts:

In a major breakthrough in the imbroglio over land acquisition for Posco’s 12-million-tonne steel project near Paradip in Orissa, betel cultivators at Nuagaon village, within the project site, have dismantled their vineyards in lieu of compensation.

According to sources, four betel farm owners have accepted compensation to the tune of Rs 4.8 lakh, while 20 more who had surrendered their claim on betel vineyards are expected to be paid around Rs 15 lakh in a couple of days.

The farmers are being paid according to the rate fixed by the state government. Company sources said they had received about 200 applications from local farmers for payment of compensation for the surrender of their claim.

These were being verified and would be cleared in a phased manner, they added.

It may be noted that betel leaves are mostly cultivated over encroached government land in the proposed Posco plant area. There are about 1,600 betel farms in Nuagaon alone.

Posco required for its plant 4004 acres of land in three grampanchayats, namely Dhinkia, Nuagaon and Gada Kujanga. Of this, 3567 acres is government land and 437 acres is private land. Most of the government land, however, is encroached upon by betel cultivators.

It may be noted that about 3,000 people working at the betel farms in Gadakujanga, Dhinkia and Nuagaon are among the most vocal opponents of the project as they fear loss of employment.

They have become soft targets for anti-Posco agitators. Keeping this in mind, the state government is framing a separate package for these workers, in addition to the existing rehabilitation and resettlement (R&R) policy formulated last year.

According to state Chief Secretary Ajit Tripathy, the stalemate over land acquisition is gradually giving way and people in the site area are coming out in support of the project.

Economic times reports that Mittal is more postive of the progress in Orissa for it’s steel plant.

Excerpts”

BHUBANESWAR: Arcelor-Mittal group CEO L N Mittal expressed his preference for the company’s proposed mega steel plant in Orissa over the one planned in Jharkhand, even as the Orissa government committed itself to provide requisite land and raw material for the greenfield project.If things go as planned, Mittal even indicated to CM Naveen Patnaik and senior government functionaries that the world’s largest steel company is keen to start leg work in January 2008.

“We are very happy with the pace of progress in Orissa. We would certainly prefer Orissa to Jharkhand considering the progress,” Mittal said, emerging from a 150-minute meeting with the CM and his team.

“We are all working hard towards starting the project as fast as possible,” he told reporters, without mentioning any deadline. The steel moghul said he was “very happy” with the way things have moved ever since the company signed an MoU with the state government in December 2006 for a 12 million tonne per annum steel plant in Keonjhar district.

“The Dastur co is preparing the detailed project report and it should be ready by mid-2008,” he said.

On the mines linkage, Mittal, who was accompanied by his son Aditya and Mittal-India CEO Sanak Mishra, said after the “very detailed discussions” with the CM, he was “very confident” about getting required access to mines. He added that he was “very optimistic” about effectively tackling rehabilitation and resettlement issues.

According to official sources, the steel monarch requested the state government to acquire at least a part of the 8,000-acre land earmarked for the project, especially the encroachment-free government land, so that the company could begin some “work on the ground early next year”. Mittal, the sources said, sought to know about the mining linkage and the government assured him full support without committing any specific mines.

In the last two days couple of press releases have come out from the Minister of Steel, Chemicals and Fertilizers, Mr. Ram Vilas Paswan. The first one assures POSCO of all help and the second one assures Laxmi Mittal about his support for ore linkages for his proposed steel plants in Jharkhand and Orissa.

Equitybulls.com reports on this. Following are some excerpts.

Hindustan Dorr Oliver Ltd has announced that the Company has got an order from Vedanta Alumina Ltd valuing Rs 300 millions for Complete In-plant water circulation and distribution piping system and compressed air piping with accessories for their 5 million ton per annum Aluminium Smelter Plant at Jharsuguda, Orissa. Execution of the said project shall be completed by December, 2007.

The Company is already working alongwith its Chinese partner Chaileco in the above Jharsuguda refinery for a Fume Extraction Plant valuing Rs 2100 million.

Kalingatimes reports that Posco is definitely interested in the Orissa project.
Excerpts of the Article below

… The latest statement from the authorities of POSCO-India makes it clear that they were here to stay – to pursue their 12 million tonne per annum capacity steel mill project in Jagatsinghpur district.

…, the company has said in a statement that it was `confident, determined and committed’ to make its Orissa steel project happen. …

But the company has said that as per its human resource plan, overseas staff deployment in POSCO-India project was purely need based.

“Staff deployment is in relation to specific assignments and the employee moves with the changes in assignment. Accordingly, when the construction phase begins, there would be reallocation of staff from overseas in large number,” a statement from the company said.

Although there had been undue delay in the implementation of the project due to non-acquisition of land for the proposed steel plant, the company has announced it was hopeful of starting ground leveling work by December this year.

“The company is further encouraged by the support extended by Government of Orissa as well as Government of India for expediting the project,’ the statement said.

“Going by the recent developments, the company is happy to note that there is a greater understanding and wider consensus in favor of the project building up at all levels, notably among people in the project site.” …

If official sources are to be believed, … POSCO authorities were ready to wait for several more years to implement the project.

“The main worry of POSCO-India authorities would be over the day they were granted prospecting licence for the Khandadhar iron ore mines by the Central government.

As regards the people’s opposition to displacement by the proposed steel plant in Jagatsinghpur as well as the move to grant of prospecting licence to the company for Khandadhar mines, sources said that POSCO was used to such resistance.

“They are hopeful that things will slowly start changing and the opposition will lose strength in due course,” a senior government official observed.

Rehabilitation process begins

Meanwhile, the company, in association with the district administration, has started the process for rehabilitating 48 families that had left Patna village under Dhinkia panchayat of Jagatsinghpur following their differences with those who were against the setting up of the steel plant in their locality.

The company was hopeful that a transit camp for the 48 families would come up within four weeks. Simultaneously, efforts were being made to select a site for constructing a full-fledged rehabilitation colony for these families.

A company official said that once the habilitation colony was set up it would attract people from the camp that was opposed to the project.

The families which had come out of their villages on their own and were supporting the project would be given rehabilitation benefits under the provisions of the existing Resettlement and Rehabilitation Policy of the State.

Going by the company’s stand, it appears clear that they might start thinking in terms of packing their bags only if the both the Central Government and the State Government expressed their unwillingness to extend help. But going by the eagerness on the part of both the governments to help POSCO-India, such a situation was unlikely to emerge in the next few years. After all, POSCO-India’s steel project still continues to carry the tag of biggest ever foreign direct investment in the country.

This sounds like a good reinforcement of it’s commitment to the Orissa project.

Business standard reports on government of Orissa and POSCO’s plans regarding R & R and compensation. Following are some excerpts.

… The government is also working on improving the compensation package for the area’s beetle-vine workers, who are among the most vocal opponents of the project as they fear loss of livelihood.

A joint exercise will be started soon for implementing the rehabilitation package. We will sit with Posco executives to decide what best can be offered to the displaced, in excess of the entitlements prescribed by the government’s rehabilitation policy and the package prepared by the company, …

The proposals which are being examined include a pension scheme for the displaced persons and a job card for all the displaced who are less than 60 years in age.

Business Standard reports on this. Following are some excerpts.

Canadian metal giant Alcan today announced an agreement to sell its 45 per cent stake in Utkal Alumina to the Aditya Birla group’s Hindalco Industries for an undisclosed sum.

The Utkal joint venture was established in 1992 between the Birlas and Alcan, with the Birlas owning the remaining 55 per cent of the equity. The venture involved the development of a new bauxite mine and alumina refinery in Orissa. …

“Alcan will have no surviving rights or obligations as Hindalco becomes the 100 per cent owner of the Utkal project,” it said. The Indian company expects the deal to be closed in the next 30 days. …

The project has been marred by controversy, with local residents opposing its construction on the plea that it will displace three villages and at least 200 families. Local critics have estimated that as many as 22,000 people could be affected. In December 2000, there was a clash between villagers and police in Maikanch over land acquisition. Three tribals were killed in the police firing that followed. Utkal was initially established as a joint venture between Hindalco, Alcan and Hydro Norsk. The shareholding was shared between Indal, now a part of Hindalco at 20 per cent; Alcan at 35 per cent and Norsk Hydro with 45 per cent. Norsk Hydro later sold its stake to the other two partners.

Economic Times reports that Tata Steel has put in an order of 4000 crores for its Kalinganagar steel plant. Following are some excerpts from that report.

Tata Steel’s ambitious 6-million-tonne-per-annum project in Orissa, central to its synergy plans with subsidiary Corus, has finally taken off with the company placing orders worth Rs 4,000 crore for the upcoming steel plant. 

The company, the largest steel manufacturer in the country, had signed an MoU with the Orissa government in 2004 for setting up a Rs 15,000-crore complex that will produce slabs and hot rolled coils.

Opposition from locals and official apathy delayed the project which was to come up in the Kalinganagar Industrial Complex of Jajpur district. …

In two separate announcements earlier this week, L&T said it is supplying and installing sinter plant and blast furnace valued at Rs 1,070 crore and Rs 980 crore, respectively for Tata Steel’s project.

Apart from the sinter plant and blast furnace, the company has also placed orders for steel melting shop and slab caster. “The total value of orders placed is over Rs 4,000 crore. We expect to start construction by the year end or early next year,” said Tata Steel spokesperson.

He added that the first phase of the project is expected to be commissioned by 2010. “Tata Steel Parivar — the resettlement and rehabilitation scheme — is underway. Around 600 families have been rehabilitated under the scheme,” said the spokesperson. The company has been allotted 3,400 acres for the steel project .

Myiris and others report on this. Following is an excerpt.

Larsen & Toubro (L&T) announced on Monday that the company led consortium  bagged orders worth Rs 10.70 billion for supply & installation of Sinter plant and other packages from Tata Steel.

Tata Steel is setting up an integrated steel plant with capacity of 6 million tons per annum (MTPA) in Kalinganagar industrial complex at Duburi in Jajpur district of Orissa to be completed in two phases of 3 MTPA each. The orders are for the first phase of this greenfield project.

Sinter Plant

L&T in consortium with Outotec, Germany bagged EPC (engineering – procurement – construction) contract for 5.75 MTPA Sinter plant valued at Rs 8.36 billion. The company`s share of this order is Rs 6.23 billion. This would be the single largest Sinter plant to be built in India. This is scheduled for completion in 30 months.

Steel Melt Shop

L&T has also been awarded the contract for civil and structural steel works of steel melt shop valued at Rs 2.33 billion. This is scheduled for completion in 28 months.

Market watch reports that POSCO expects to complete land acquisition by year end for it’s Orissa steel plant. Following is an excerpt.

‘Lee also said Posco expects to be able to secure all necessary land for its planned 12 million ton-a-year plant in Orissa, India, by the end of 2007, with construction projected to start in the first half of next year.
Posco is set to invest $12 billion to complete the plant by 2016. Orissa’s state government has so far allocated 1,135 acres of land to Posco, which has requested 4,000 acres. ‘

Other news to be seen is that it has had massive profits due to improved cost-savings from FINEX technology.