___________

Following up on the report in our previous entry, another political party, albeit with a small presence in Orissa, has come out in support of POSCO. Following is an excerpt from Pioneer.

The Samajwadi Party has lent its support to the pro-Posco villagers in their bid to cooperate with the officials for land acquisition for the company’s steel project. The party’s State president Baisnab Charan Parida, in a statement, said adequate compensation to the evacuees and their proper rehabilitation, training to the local people for employment and a thorough discussion with the supporters and opponents of Posco on development of education, health and communication facilities in the peripheral area by the company official as well as the State Government should be taken up at the earliest.

In an era of globalisation, if a country hesitates to open up its economy and decry establishment of industries by multinationals, it would remain backward, he added.

POSCO has also come up with some novel opportunities for the displaced people. Following are excerpts from a Business Standard report.

Korean major considers offering locals an export market in addition to compensation.

Korean steel giant Posco is taking a novel route to persuade land-owners to sell their land in Orissa’s Jagatsinghpur district where its Rs 52,000 crore, 12 million tonne steel plant is to be located.

Apart from monetary compensation for the land, Posco is offering the 140-odd fishermen families that will be displaced by India’s largest greenfield steel plant an assured market for dried fish and mango pickle in South Korea.

The company, which has been facing stiff resistance from locals who will lose land to the project, proposes to train fishermen in the area to produce the dried fish coveted by Koreans, according to a Posco India spokesman.

“Around 160 families in the periphery have shown interest and will be included in the programme,” he said. He said some 160 families on the periphery of the project had accepted the proposal.

A similar programme is being planned for betel vine cultivators. “They have shown interest in fruit, especially mangoes. We will get pickle manufacturers to collaborate with them and export these products to South Korea,” he added.

A socio economic survey, which is still being conducted, indicates that there are around 50 betel vine owners and 1,000 cultivators for 1,200 betel vines. “Not just the owners, the cultivators will also be included in the programme,” he said.

The plan has been suggested as a solution to the vexed problem of compensating land-losers by offering them sustainable livelihood. At the same time, it will meet a growing demand for dried fish and pickle in Korea. According to reports, Korea’s imports are expected to exceed exports due to depletion of fish resources. Its pickle demand is primarily met by China.

…“The products developed by the fishermen and betel vine cultivators will be exported to Korea through Posco’s captive port. After meeting the demand in the Korean market, they can be exported to South East Asia,” the spokesman said.

Posco India is currently in the last leg of its land-acquisition programme. Of the required land of 4,004 acres, the Orissa government is to provide 3,566 acres (of which it is yet to get possession). The company will have to buy the remaining 438 acres of land directly from land-owners.

The rehabilitation & periphery development advisory committee (RPDAC) is expected to meet shortly to decide on the compensation package. The committee comprises representatives from the government, the company and the local people.

The private land covers three gram panchayats — Gada Kujanga, Muagaon and Dhinkia, the latter being the largest tract covering 200 acres and has been the most aggressive in leading an agitation against Posco’s steel plant.

However, the Posco spokesman said, things have improved and the survey indicated that around 90 per cent of the people wanted to shift to other means of livelihood.

Following is a report from Samaja on this. This is what more legislators of the area should be doing, but without fighting among themselves.

Following are excerpts from a report in english.chosun.com.

… After a rough start, POSCO is expected to finally have a site allocated for a planned steel mill in India, while an investment in a new Vietnam steel mill is likely to move ahead in October.

According to POSCO on Wednesday, the Indian government recently made it known that they plan to determine whether to give environmental clearance for the 4,004 acre site in Paradip in the province of Orissa.

Some 3,566 acres or 89.1 percent of the site of the planned one-stop steel system belongs to the government. Of that, 3,097 acres (86.9 percent) is forest land. For now, POSCO has only secured 193 acres (4.8 percent).

A POSCO official said, "The final decision has not yet been made, but we heard that the site might be released from the forest zone soon. The state-owned land accounts for nearly 90 percent of our site. In other words, if the area is released from the forest zone, the biggest obstacle to our effort to secure the site disappears."

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 a Sambada report.

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.”

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.

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.

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.

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.

Following are excerpts from the Economic Times report on this:

A GROUP of ministers (GoM) on Friday cleared the National Mineral Policy that retains the freedom of mining companies to export iron ore without restrictions on quantity or quality. …

The decision also clears the cloud over Posco’s proposed steel project in Orissa that has proposed to export some portion of ore from its captive mines. The company has proposed the exports to enable it to import high-grade ore required for mixing.

However, in order to facilitate value addition within the country and boost steel production, the new policy has given more powers to the state. The state governments will be able to give preference to companies undertaking value addition within the state while allotting iron ore mines. This will mean standalone mining activities will be disincentivised. However, the entire country will be treated as one economic region and states will have to permit transfer of ore outside the state if no one is willing to put up a plant there.

Moreover, the GoM has decided that a balanced policy will be followed while granting captive iron ore mines to steel companies. The policy will, therefore, provide captive mines to all steel units in operation up to July 2006 . It will also benefit the states as under the new policy, the present system of specific rate royalty will shift to ad valorem rate of 7.5%. Once notified, the proposal will increase royalty earnings by almost six times. For example, royalty earnings from iron ore of five ore producing states work out to Rs 250 crore. This will increase to Rs 1,250 crore under the new regime.

However, the new policy will also clip some of the powers of the states. The states sitting over mining applications of companies will be penalised as delays will transfer their powers to the Centre.

Another important aspect of the new policy is that a process of competitive bidding can be initiated for allocation of captive coal blocks. This is presently done by a screening committee within the coal ministry. The bidding process will also be started for all other major minerals.

Besides, the government will auction mining areas where full prospecting has to be done. This will require amendments to the Mines and Mineral (Development & Regulation) Act, 1957, that is likely to be introduced during the monsoon session of Parliament.

Under the new policy, companies will have to earmark 3% of turnover for undertaking rehabilitation and resettlement of displaced people under a sustainable development model. However, the ministry of environment and forests will work out fresh guidelines separately to introduce environment-friendly mining practices in the industry.

Financial express carried a short interview of POSCO India Chairman and MD with journalist Dilip Bisoi. This interview gives a good idea of the status of the POSCO India project. Following are some excerpts:

• How you are going to accelerate the project’s implementation? We have chalked out a strategy to implement the project. We are preparing to start the ground preparation work by October 2007. Out of the 4,004 acre of land, 3,566 acre is government land and 438 acre is private land. Out of the private land, only 30 acre is fertile land as it yields double crops. We are willing to exclude the 30-acre fertile land from the project site. We are also willing to differ use of the 438 acre private land until the villagers were willing to sell.
• Anti-Posco activists have set up checkpoints and are not allowing anybody to enter the site. How do you plan to enter the area and start work? It is not true that we don’t have access to the site. We do have some access to the site. Villagers in Gadakujanga grampanchayat are supporting the project, while people in Nuagoan area are starting to change their mind in favour of the project. Only a small area of Dhinkia grampanchayat is not accessible. We will shed that portion from the project site for the time being. Access to the site and starting civil work will not be difficult.
• Have you prepared your R&R package?  We are preparing a special R&R package for the displaced people. The Xavier Institute of Management, Bhubaneswar, has been engaged in conducting a survey to understand the needs of the people. The package will be announced once it gets the approval of the Rehabilitation & Peripheral Development Authority. I promise, I will make their lives better than before. Rehabilitating 450 displaced families is not a big job. We want to provide them with a sustainable livelihood.
• How confident you are that the project work will start by October 2007? The next two to three months are very crucial. The prospecting licence for the Khandahar iron ore mines and forest clearance for the project site are expected in the next few months. Once these issues are settled, we will go ahead with the land preparation. If everything goes according to plan, we will procure equipment for the steel plant by the second half of next year. We will shop in the Indian market before going to Asian countries like China and Vietnam. The main plant, however, will be imported from Posco in South Korea. However, starting of the peripheral work at the site by October is very essential.

Economic Times reports  road development related to POSCO’s proposed operations. Following are excerpts from that report.

… the government has decided to develop 600 km of highways, to be called Posco roads, to provide connectivity for the 12 million-tonne capacity steel plant in Orissa. The Rs 4,000-crore highway would be constructed on built-operate-transfer (BOT) model and would be completed by 2010. 

The projects are part of phase-III of the National Highways Development Programme (NHDP). The Posco package consists of seven road stretches, including Panikholi-Keonjhar-Rimoli on national highway (NH)-215 and Chandikhole-Duburi on NH-200. The Cuttack-Paradip state road, jointly funded by the Orissa government, Paradip Port Trust and the roads ministry, will also help serve the transport of goods to and from Posco’s steel plant.

“NH-215 and NH-200 will be specifically geared to carry iron-ore traffic,” the official said. “The roads will serve Orissa’s industrial requirements for upcoming projects in the state, but Posco will be the biggest beneficiary,” he added.  …

Apart from road connectivity being provided by the Centre and the state government, a special purpose vehicle (SPV) to link Haridaspur and Paradip by railways has been formed by Rail Vikas Nigam (RVNL) in which Posco has 10% equity,” a Posco spokesperson said.  …

Posco-India will also build a captive port at Jatadhari, 10 km from Paradip and a captive power plant with a capacity of 1300 mw.  …

The company will also lay pipelines for industrial water utilisation from Jobra barrage.

Livemint was mentioning that POSCO is renowned to be socially a very conscious Industrial company. Following are some excerpts:

A mobile health van goes to some villages at least one day a week, young women have trained as beauticians, doctors have flown in from Korea to fix the cleft palates of local children, scholarships for study have been awarded and street lights have been erected.

On an international level, corporate social responsibility (CSR) has been a major focus for Posco, the only major steel company listed in the Dow Jones Sustainability Indexes, which track the performance of leading companies deemed to operate in a socially responsible manner. Its efforts in India coincide with increased attention to the subject.

Perhaps, this could be a pointer for MNCs who want to invest in backward states like Orissa.

I came across several leaflets and brochures in POSCO-INDIA’s Press room pages. Following is the brochure that highlights the NCAER study that I mentioned earlier.

Business standard reports that POSCO is considering offering shares as part of its R & R. Following are some excerpts from that report.

Meanwhile, Posco is considering share allotment to landholders as an option for its Rs 52,000 crore project in Orissa. The company, which requires nearly 4,000 acres of land for a 12-million-tonne plant, says it will take a call on the issue by the end of this month.

“No doubt this is an option but we will decide after we know what people want,” a Posco spokesperson said. To understand land-holders’ demands, the company has asked Xavier Institute of Management, Bhubaneshwar, to carry out a socio-economic survey.

Of the 4,004 acres of land Posco requires, 3,566 acres is government land and 438 acres under private ownership.

The private land covers three gram panchayats of Gada Kujanga, Muagaon and Dhinkia. Dhinkia’s is the largest tract covering 200 acres. The area has a significant peasant population with communist affiliation.

The spokesperson added that any share issue would have to be over and above the compensation. “Otherwise, people will not like it,” he said.

Both Posco and Videocon will also offer one job per displaced family.

The Orissa rehabilitation and resettlement (R&R) policy has a provision for convertible preference shares to be issued to displaced people. The value of the shares could be up to 50 per cent of the one-time cash assistance.

I came across a 1-page note someone from POSCO-India gave me when I was visiting Bhubaneswar in December 2006-Jan 2007. The 1-page note summarizes a study done by NCAER. The study has also been reported in News media such as Hindu Businessline. (POSCO-India in its web page has additional links.) We will give some excerpts from the Hindu Businessline report.

The 1-page note: POSCO-India’s rs 52,810 Cr investment by 2016 will stimulate Orissa Economy.

• Economic Benefit:
  • Generate Rs 29,760 crores additional annual gross output for Orissa including Rs 12,610 Crore of POSCO-India’s direct gross output.
  • Create excess annual value addition of Rs. 12,100 crores for Orissa which equals 19% of Orissa’s state GDP in 2005-06 (equals 11.5% in 2016-17)
• Employment:
  • Job creation of 870,000 man years, absorbs 88% of state unemployment backlog (i.e., decrease in backlog of employment from 9.9 lakhs in 2005-06 to 1.2 lakhs).
  • 18,000 man years of direct employment in POSCO-India.
• Tax Contribution:
  • POSCO-India annual tax contribution (Rs 2,620 Crores) would be appx. 17.6% of total tax revenue of Govt. of Orissa in 2016-17.
  • POSCO-India SEZ would contribute Rs 174,970 crore tax revenue in next 35 years.
    • Rs 77,870 crores would be to Govt. of Orissa and Rs 97,100 crores to Govt. of India.
    • The differences of tax between SEZ and DTA status is less than 8% for Govt. of Orissa and 5% for Govt. of India.
• Comparison with current Orissa Economy:
  • Orissa in 2003-04:
    • Gross Output: 111,378 crores
    • State GDP: 53,830 crores
    • Employment: 143 lakhs (2001 census)
    • Tax: 8170 crores (2005-06)
  • POSCO-India’s impact:
    • Gross Output: 29,760 crores
    • State GDP: 12,100 crores
    • Employment: 8.7 lakhs
    • Tax: 2620 crores

We now give some excerpts from the Hindu Business line article of January 2007 which partly explains how some of the above numbers were calculated. That article was written by R. Venkatesan who works for NCAER, but the article was his personal view.

The NCAER study broadly used the ADB/World Bank methodology on the social cost-benefit with minor adjustments for the local parameters. Econometric models were used to project border prices for the useful life of the project. The project’s impact from the State economy perspective — in terms of the impact on the State GDP (output multiplier effects) and employment opportunities created within the State (employment multiplier effects) was also assessed.

The output multiplier for iron ore was found to be 1.4 compared to 2.36 for steel. In other words, every Rs 1 lakh worth of output in the iron ore sector would result in Rs 1.4 lakh of output (including the Rs 1 lakh output of iron ore) compared to Rs 2.36 lakh for every Rs 1 lakh output of steel. The employment multipliers for iron ore and steel work out to 0.35 and 0.69 man-years respectively. Therefore, in terms of both output and employment, steel has a larger impact.

These multipliers imply that the Posco project would create an additional employment of 50,000 person years annually for the next 30 years vis-à-vis 870,000 person years in the steel project alternative. In terms of value addition, the iron ore and steel project alternatives would contribute 1.3 per cent and 11.5 per cent to Orissa’s State Gross Domestic Product (or SGDP) by 2016-17 respectively.

An important part of the study was the Least Cost Analysis of technology options in the steel-making, the Finex process that Posco purports to bring and the traditional blast-furnace technology. The Average Incremental Economic Cost was used as the yardstick; this was followed by computing the economic IRR (internal rate of return)
to examine whether the project was economically worthwhile from the national economy point of view.

The EIRR for the Orissa project works out to 16.6 per cent for base case and even in the worst case scenario, the EIRR at 13.9 per cent would remain above the hurdle rate of 12 per cent. The economic impact of the project was estimated at $2.5 billion at the test discount rate of 12 per cent.

The significant feature of the study was the estimation of depletion premium or the opportunity cost for depleteable and non-renewable resource iron ore for reasons cited below:

India’s high-grade ore (+ 65 per cent Fe content — Haematite) reserves, proven and probable, amount to only 0.58 billion tonnes. And even if we were to factor in indicative and inferred reserves (probable/feasible), the total reserves (proven and possibly future potential) would be only 0.92 billion tonnes.

India’s medium-grade ore (+62 per cent Fe to 65 per cent Fe — Haematite) reserves, proven and probable, is only 1.3 billion tonnes. Here too, if we factor in indicative and inferred (probable/feasible and pre-feasibility estimated) reserves, the total reserves (proven and possibly future potential) will be only 2.8 billion tonnes.

Policy Implications

Orissa stands to gain significantly if instead of exporting iron ore it processes it to steel within the State, in terms of both employment generation (17 times), and GDP impact (9 times).

India’s high and medium grade iron ore reserves may not last more than 19 years even if exports of these grades are frozen at the current level or if the targets set out in the draft steel policy are to be met. The economic analysis considered the depletion premium for high and medium grade iron ore. This is the opportunity cost to the national economy of using the depletable resource, which is the average incremental cost of depletion premiums computed year-wise.

Any exporter of iron ore of medium and high grades from the State needs to pay a depletion premium of $27 per tonne. Even this would be a sub-optimal policy from the State’s viewpoint if it can process the medium and high grade ore to steel. No such depletion premium has been applied for coking coal as its price did not exhibit any
trend before the recent steep price hike.

For the eastern States seeking to raise the mineral sector’s share in their GDP, it may be a good idea to set up processing facilities. It would not be advisable to allocate iron ore mines through open bids or accept increased royalty payments, even accounting for the depletion premium, compared to the option of processing iron ore to steel. Future cost-competitiveness and logistical advantage imply that iron ore-rich States can compete with existing over-capacities in the US, Europe and Japan even after factoring in the capital charges for new investments.

Export of iron ore needs to be restricted to grades other than medium and high-grade ore categories; for instance, export of beneficiated ore from Goa using inland waterways logistics advantages could be encouraged. Allowing exports of high grade ore would facilitate export of steel from existing over-capacities in the US, Europe and Japan to East Asia at the expense of future steel exports from new Indian steel capacities which are likely to enjoy cost-competitiveness over existing over-capacities elsewhere.

I am not qualified to judge the above analysis. I would appreciate any comments, analysis, criticisms etc. on the above.

Samaja has a beautiful editorial page article by Ramachandra Pattanayak. In it the the author explains that if we continue opposing Posco, Tisco and Mittal what will happen is that steel plants will be made in other states, our mines will be assigned by the central government to these steel plants in other states and we will lose out on many fronts including infrastructure development that comes with steel plants, ancillaries, etc. Similarly, he says it does not make sense that we are so vocal about IIT etc. and yet we oppose Vedanta University.

I agree with the author. The assignment of mines is not fully under state govt. control. We can not sit on requests and delay assigning mines. If we do that currently the central govt. has the right to assign the mines to others. Losing out on the mines, we lose out on the related infrastructure developments such as townships, railways, roads, and to some degree ports. We also lose out on the ancillaries. In this regard one may note cities with big steel plants such as Rourkela or Jamshedpur. They all have lots of ancillary units around that area. So even if the main steel plant does not employ as many people as in the past, there are more opportunities for ancillaries these days as the state is keen on going after auto factories, bicycle factories etc. These ancillaries will hire a lot of people. But, of course, we should not force people out of their land; they should be enticed with good compensation (R&R). On the other hand we need to be very careful and wary of some of the neighboring states who are trying to spread their ideology to our state and in the process trying to steal some of these upcoming developments in Orissa. In this regard it is amazing that politicians and MPs from a neighboring state are able to come to Orissa and say that their party opposes such and such project in Orissa. At the same time the party of these politicians support industry in their state so much that they or their allies have sent in cadres dressed up as policemen to kill and rape people opposed to industrialization in their state. What gull these politicians from the neighboring state have and how stupid we Oriyas are to invite them, give them a platform and listen to them.

Following is somewhat of a dated collection on investments and investment plans in Orissa.

• Summary: [1], [2], [3:Interview with CM]
• New jobs: [1.5 lakhs new jobs]
• Directorate of Industries, Govt. of Orissa
• Education and Education related financing
  • Loans and insurance for college education:
    • a great Andhra bank scheme
    • An educational loan portal
    • Another educational loan portal
    • Yet another educational loan portal
    • A rediff article with pointers
  • Higher Education: [FinExp-Aug05]
  • Primary and Secondary Education: [Insurance-plan-Aug15-05], [Insurance-plan]
    Editor’s comment, Aug 14, 2005: The private engineering colleges and medical colleges should be encouraged to open one or more Class I-XII schools. In general, these private colleges should spend 10% on the above, 80% on their own stuff, and another 10% on post-graduate education. For the 10% parts they can either have their own ClassI-XII school and M.Tech/Phd Program or pay the amount to an appropriate fund.
    Editor’s comment, Aug 14, 2005: For Oriya medium students to compete well in national and international level exams and competitions, after class 7 one should have the option of pursuing science and social science either in English or Oriya. To overcome the worry that students will lose touch with Oriya by pursuing science and social science in English, from Class 7, Oriya should be split to two parts, and be assigned twice its current weightage. I.e., instead of 100 marks for Oriya, there will be 200 marks for Oriya. The two parts could be (i) grammar and vocabulary — similar to TOEFL and GRE, and (ii) Writing and literature. ( Some decisions related to this made by the Orissa government.)
• Information Technology: [TCS1], [TCS-2], [TCS-3], [Wipro-BPO-1], [WIPRO-2], [Wipro-land-bought], [other IT and BPO companies]
• Steel plants: Tatas, KK Birla Group, Jindals, Essar, Murugappas, MESCO, POSCO etc. [1], [2], [3], [4], [5], [6:Jindal], [7:mesco-insightOrissa-july22-05], [8: A summary article in May 05 Orissa Review], [Adhunik-Sundergarh], [Rungta,Bhusand,Jindal-JSPL,Titanium], [production in 9 plants], [More MOUs], [More MOUs2]
• Tatas – Steel plant@Duburi, TCS@BBSR, Gopalpur: [0: TATA news releases], [1], [2], [3], [4], [5], [6:Kalinganagar],
• POSCO: [1], [2], [3], [4]; [Forbes-MOU-22Jul05]; [Forbes-2-22Jul05]; [FinExp-MOU-22Ijul05]; [HindTimes-MOU-22Jul05]; [AustrFinRev-MOU-22Jul05]; [InsightOrissa-MOU-22Jul05]; [Some-Details-from-Insight-Orissa]; [Pluses-n-minuses:rediff]; [Impact-on-infr]; [Hindu-July10-05]; [Rebuttal-to-criticisms-july15-ToI]; [FinExpr]; [Taats vs POSCO] ; [3 POSCO subunits]; [POSCO sets up subsidiary:Aug 31’05], [land-acq], [90 percent in Orissa in favour], [identifies 2 mines]
• POSCO ancillaries and Indian partners: [1:steel pipes], [2:Indian partners]
  • Editor’s comment on July 4 2005: My impession based on reading the newspapers is that Orissa govt has probably become wary of some of the big Indian players after the TATAs taking advantage of them in Gopalpur, and other companies in other places. It seems like (from reading various reports: [0:a list from 1999-how many of them materialized?], [1] , [2], [see page 3], [4] ) the TATAs signed MOUs about plants and infrastructure etc. at Gopalpur and got mining leases but then kind of forgot about making the plants and building infrastructure but have been using the mines. They used excuses, some valid, regarding this and that infrastructure not being there. [They have signed something more recently; lets see if that is for real or a sham to get mining leases renewed. Some progress in regards to their promise seems to have taken place: a; b ] The expectation was that Gopalpur would be like another Rourkela or Jamshedpur. But nothing remotely like that has happened. Coming back to POSCO, the MOU seem to have many clauses that would prevent POSCO from taking advantage of Orissa without delivering on its promises. Also, if POSCO does something like the TATAS, its easy to fight them, unlike fighting the TATAs. Even saying something bad about the TATAs is a no-no in India. [Thus the government should be careful in any of its signing with the TATAs or similar big Indian powerhouses. It should make sure that any mining lease should be tied to the other promises very tightly, and without loopholes.] So I personally am hopeful that POSCO will have a big impact on Paradeep and Orissa, more than the impact of any other private company in Orissa. Plus the investment comes from outside India, not from inside India. Thus making more capital available to other projects in India. Also the government is right to not put its egg in one basket. It makes perfect sense to try different avenues: foreign investors such as POSCO as well as the various Indian companies.
• From Steel to automobiles/2-wheelers-n-beyond: [Ind-Exp-22ndJune05]; [TOI-July4-05:Kymco,Corus]; [Pioneer-July27-05:Kwang-Yang-Motors-Taiwan], [Mahindras:TOI-Aug05-05], [Mahindra:InsightOrissa]
• Refractories: [July9-05-Telegraph]
• Alumina/Aluminium: Hindalco [1]; Vedanta [a], [b:Vedanta cares]; [Dubal-L&T]; [alumina-refinery-smelter-Rayagada]
• Titanium complex at Chhatrapur. (The Samaja Aug 16th, 2005).
• Mining: [1],
• Refinery: [1]; [IOC-Paradeep-21-6-05]; [July12-FinExp], [IOC-on-schedule]
• Breweries: [United Breweries]
• Paper: [JKPaper]
• SEZs: [1]
  • Gopalpur: [july26-05]
  • Paradeep: [july26-05]
• Power: Current availability; [list-of-possibilities-fe-july24-05], [June2-05-Reliance]; [Reliance2]; [RPG-jun2405-Tel]; [Neyveli]; [MMTC-Paradeep-Sept12-05]
• Food processing: [Shrimp-Navayuga]
• Hospitals: [Planned Heart Institute]
• Hotels: [ Statesman Aug 18’05], [Buisness-Standard- Sept9], [OTDC-disvestment]
• In relation to other states of India: [1], [2]
• Kalinganagar/Duburi: VISA, Jindal, Neelachal Ispat Nigam, MESCO, Tatas(?) [Ref:InsightOrissa]
• Factories in neighbouring states — impact on Orissa infrastructure: [Mittal-Jharkhand]
  Editor’s comment on July 27, 2005: Jharkhand and Chhatisgarh are landlocked. Mineral and manufacturing plants in Jharkhand and Chhatisgarh would need access to ports. This will provide opportunity for Orissa to make its case (get Jharkhand and Chhatisgarh legislator’s support) and make further infrastructure development such as ports, roads and railways. In particular, Dhamara and Chandabali port, train lines to them such as Tata-Baripada-Balasore-Dhamara, Bimlagarh-Talcher-Paradeep, and Daitari-Bansapani-Haridaspur-Paradeep, and roads ( Jharkhand, Orissa, Chhatisgarh) to them. While Jharkhand plants can use Haldia port in West Bengal, for Chhatisgarh the closest ports are in Orissa (Dhamara, Paradeep, and Gopalpur). Since Haldia port is overloaded, even for Jharkhand easy accessibility to Orissa ports is important. [a step in this regard], [another step]
  28th July 2005: Orissa, Jharkhand and Chhatisgarh should come together and jointly pursue several things. For example, an IIT in Rourkela (which has the best NIT among the three states) would benefit all the three states, as Rourkela is very close to both Chhatisgarh and Jharkhand. In return Orissa can support for an IIM in Bilaspur or Raipur. Good road and railway connectivity from Chhatisgarh and Jharkhand to Orissa ports will be beneficial to all. The three states can jointly promote cultural tourism to the tribal areas of the three states.
• Policies: [1]