___________

The following information regarding R & R offered by TATA steel at Kalinganagar is from a Tata Steel brochure that they give me. If there is any inaccuracy in it or if similar packages are not being offered by Tata Steel to others in Kalinganagar please let me know.

[Context: After I had written an open letter regarding how Tata Steel is exploiting Orissa and yet referring to it as marriage between Tata Steel and Orissa, they got in touch with me in December 2006 when I was visiting Bhubaneswar. Although I am still unhappy with Tatas overall (as they have not done much on the issues I mentioned in the open letter), I personally think the following is a decent package and I hope other steel and aluminum companies such as POSCO, Mittal etc. use this R & R as a starting point.]

The R & R parameters used by Tata Steel:

1. Famiy definition: All major sons as on 1st January 2005 to be considered as separate famiy for R & R benefits.
2. Plot in the Rehab colony: One homestead plot per expanded family. Each original family would get about 3 to 7 plots.
3. House building assistance: Rs 1.5 lakhs per expanded family (as per the new definition). Each original family would get about Rs 4.5 to 10.5 lakhs
4. Temporary accommodation: Rs 0.1 lakhs per expanded family. In addition, providing immediate shelter during construction of their houses at a cost of about Rs 10 crores.
5. Transportation assistance: Free transportation of all househod materials, cattle etc.
6. Employment: One nominated member from each expanded family. i.e., providing more than 1200 jobs for 679 original families. Cash-in-lieu (rs. 2 lakhs per family) for the older people upon their choice. Engagement provided during the construction itself.

An example scenario: Family of late Sukura Soren. Hamlet: San Chandia. Mouza: Chandia.

1. Family Tree: Late Sukura Soren owned 2.79 acres of land including house site. He had three sons: Late Abhiram Soren, Madhu Soren (71) and Sinu Soren (60) . Abhiram Soren is survived by wife Tulasi Soren (56) and four sons Mansingh Soren (33), Mataram Soren (30), Manika Soren (25), Rajen Soren (43). Son of Rajen Soren is Ghana Soren (19).
2. Number of expanded families = 8.
3. Compenstation for two houses: Rs 0.74 lakhs
4. Land Compensation: Rs 2.79 lakhs
5. 8 numbers of 1/10th acre plot in the rehab colony worth – Rs 4.0 lakhs
6. Total house building assistance – Rs 12.0 lakhs
7. Temporary accommodation assistance – 0.80 lakhs
8. Transport allowance – Rs 0.16 lakhs
9. Maintenance allowance – Rs 1.92 lakhs
10. Cash in lieu of employment for 3 persons – Rs 6.0 lakhs
11. Total employment – 5
12. Total Cash benefits – Rs 28.41 lakhs

Often many well-meaning people read about a particular R & R package for one location in one state and then compare it with R & R package and/or land prices offered in another state, in our case Orissa, and start making wild allegations that the Orissa government is incompetent in getting a good deal for its people or the company or foundation that wants to set up something is evil etc. etc. To make the obvious point, obvious to anyone who thinks rather than is driven by his/her preconceived ideology, that land prices vary across different locations in India, following are some data points.

(i) Hindu and Pioneer report about the Brahmani steel plant coming up in Jammalamadugu in Andhra Pradesh. There the Andhra Pradesh government has procured land at Rs 18,500 per acre for the steel plant which will need 10,640 acres. The government has also promised allotment of 3000-4000 acres for an airport at the price of Rs 9,000 per acre. The exact quotes from Pioneer are as follows.

The plant, to come up on an area of 10,640 acres, will be the second biggest plant after the Visakhapatnam steel plant making Andhra Pradesh the biggest steel producing State in the country. …

The Chief Minister denied any favouritism in providing land to the project and said that prices higher than market price was paid for the land. “The land has been purchased at the rate of Rs 18,500 per acre which is the highest in the district,” he said.

The quote from Hindu is as follows:

Announcing that BIL Managing Director Janardhana Reddy, an MLC in Karnataka, had agreed to construct a commercial airport nearby, he promised allotment of 3,000 to 4,000 acres of land at Rs. 9,000 per acre, half the price charged for land given to the steel plant.

(ii) On the other end of the spectrum following is an excerpt from Moneycontrol on land prices and compensation offered for land in Dankuni near Kolkata.

Construction giant DLF has offered to pay a whopping 55 lakh rupees an acre for acquiring close to 5,000 acres near Kolkata.

Never before has any company paid so much. Even the government paid up to 14 lakh rupees an acre in Singur, which is 20 kilometers away. DLF proposes to build an integrated township and a 100-acre SEZ. And the rehabilitation package it has promised, is awesome – guaranteed employment, alternative housing, education and even healthcare facilities for displaced farmers.

So what is our point? and Why is it relevant to Orissa’s growth and infrastructure development?

There are several land acquisitions going on in Orissa with respect to industries (POSCO, Tatas etc.), for Vedanta University, for various rail and road projects, etc. So when you come across a price or compensation package in another state and it does not gel with some other packages in Orissa that you have read about, please investigate more before getting all riled up and accusing the Orissa govt., its ministers, its bureaucrats, or the companies. They may as well be at fault, but please do research before deciding on it and shooting off emails or postings, as the above data points make it clear that land prices vary quite a lot among different locations in India.

Another point we want to make is that, Orissa has to balance between getting the best deal for its people (beyond the market price) and losing the project to another state. Again, the data point shows that there are other states who can offer very cheap land price and if Orissa asks too much (beyond the market price) then there is a real risk of losing the project. In case of steel and aluminium project, losing the project and consequently delaying in allotting certain mines may also mean that the mines may be allocated by the central govt to out of state companies. As a result Orissa will lose out on the value addition and on the infrastructure (such as roads, railway links, ports, townships, etc.) that are associated with large steel and aluminum plants.

A suggested approach to get the best deal for people (beyond the market price) losing their land is to have a central R & R policy that every state must follow, so that they don’t compete on the basis of who can offer the cheapest (relative to the market price of that particular location) land price and R & R. This can also be achieved if the relevant states (Orissa, Chhatisgrah, Jharkhand, etc.) agree on a common policy. (Sandip Dasverma, a friend, has often mentioned the later.)

[Acknowledgments: Deba Nayak of ornet for pointing to the Pioneer article in ornet. Participants of Orissa Today google group for engaging in multiple debates on this issue.]

Business Standard in an article in April listed several infrastructure related projects that Orissa is planning using PPP. Following are excerpts from that article.

… the Orissa government has lined up 18 new projects in the Public Private Partnership (PPP) mode entailing an investment of over Rs 6000 crore.

Of the 18 projects, 12, mostly large and medium, have already been consolidated with investments of Rs 3500 crore.

Another six projects, fairly bigger in respect to the previous ones, are under active consideration and would cover an investment of around Rs 2500 crore, according to government sources.

Source said, till date, an around Rs 5300 crore investments have already been lined up and are under implementation in the PPP module in 12 odd projects across the state.

In all the Orissa government plans to develop 30 odd projects in different sectors in the PPP module over the next two years covering an investment of over Rs 11,300 crore. …

The PPP modules currently under implementation and those under consideration cover a wide range of activities starting from port cuilding, railway line construction, road development and erection of urban clusters. …

The new projects being considered under the PPP module included development of road links in the Capital Region Ring Road, the Bhubaneswar-Paradip Road, the Suakati-Dubuna Road and the Tensa-Barsuan-Lahunipada Road.

These would entail a primary investment of Rs 1547 crore for the development of 279 kilometres of road, including a four-laning of the first one.

Other than this there would World Bank identified projects where four laning would be done of the Sambalpur-Rourkela road from the existing two-lane road.

The long pending Joda-Bamebari Road and Koira-Rajamunda Road covering 229 kilometres would also be taken up.

The PPP module would be used for two vital rail links. The first was the Angul-Duburi-Sukinda rail link and the second the Gunupur-Theruvali link. In both cases, the Special Purpose Vehicle ( SPV) route was being proposed. The investment for the rail links was estimated to be in the region of Rs 570 crore. The Angul-Sukinda rail link would be of 90 kilometres and the Gunupur-Theruvali link would be 79 kilometres.

PPP’s for setting up Bio-tech parks, SEZ for IT/ITES companies and integrated commercial and residential complex, an enclave at Shahidnagar are were also part of the city building endeavour of the Orissa government.

This apart, a commercial shopping complex and an A.C.Market complex at Unit IV are also being contemplated in the PPP mode as part of city development plan.

Till date, investment for the SEZ for IT/ITES companies had been identified and were estimated to be in the region of Rs 35.67 crore. As for the other residential and commercial complexes, project details and cost were being worked out on a war footing.

Coupled with these, a multi-product SEZ at Paradeep had been suggested by the government for development using the PPP route. It was expected to entail an investment of Rs 712 crore.

Land of around 1093 hectares would be needed for the SEZ in the Marshagahi Tehsil of Kendrapara under Paradeep.

This article is probably based on a presentation available from the Orissa govt. website. That file seems to be corrupt but its google cache shows part of the information.

The Economic times reports that visa group plans to create a Thermal power plant of 1000 MW in Orissa. This will be done in 4 phases of 250 MW each with the 1st 250 W unit expected to be operational in 2010 September. The project is scheduled to be completed by 2012 March. I hope they pay serious attention to the pollution aspect.

Euronext reports that Velcan energy, a environmentally conscious energy generator has plans to create two concessions in the Baitrani river at Tarini and Bhimkund (in Anugul district).

These two places are approximately 150 kms from Bhubaneswar. This is expected to have a power production of 200,000 MWh per annum. This is expected to be a eco-friendly power project since it uses a renewable energy resource.

All the financial details are present in the euronext link above.

NDTV reports that the Gopalpur SEZ has been cleared by the Central Govt.

There was a lot of hue and cry that why the Gopalpur SEZ was not moving further in Orissa. Recent events show that it was held up due to security clearances which was required. Hopefully this will ensure faster development in Orissa.

Tyre and Accessories reports the Applo Tyres group plans to invest Rs 4,000 million in expanding health care venture. At present the company is looking at a number of prospective cities including locations in Jaipur, Chandigarh, Ludhiana, Vadodara, Coimbatore, and Bhubaneswar.

Economic times reported that Tata’s proposed multi-product special economic zone (SEZ) in Gopalpur is finally set to get the green signal from the government.

Tahtya reports that Chhatisgarh Futuristic Infrastructure Development Company (CFIDC) has floated a proposal to set up a Gems and Jewellery Special Economic Zone (SEZ) in the state.

The company has come up with a proposal to set up a sector specific G&J SEZ at Bhubaneswar on a land of 150-200 hectare near the air port with an investment of Rs.250-Rs.300 crore.

Samaja also covers in its news.

It gets reported once in a while [Hindu1, Hindu, Technoligence,iocl ] that IOC plans a new 300,000 barrels a day refinery and petrochemical complex at Paradip. Timesnow.tv has a recent report on this.

Moneycontrol India reportted the following.

Chinese steel company Baoshan Iron & Steel company or Baosteel is set to invest in a ferro chrome unit in Kalinganagar in Orissa, reports CNBC-TV18.

It futher says, it would be a joint venture with Visa Steel’s who has a 50,000 tpa ferro chrome unit in Kalinganagar to be commissioned in June.

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.

Slowly more news about this is coming out. [Financial Express, Kalinga Times, Tathya.in 1,2,3 ]. Following are some salient points culled from various news articles. (More will be added as more news report come in.)

• Financial Express: The hub, which will come up on a built-up area of 1.5 million sqft n the Chandaka Industrial Estate of the city, will act as a centre or convergence of the bank’s activities, like call centre, ack-office operations for banking & insurance as well as sales and administration.
• Financial Express: The proposed hub would accommodate approximately 10,000 people in a phased manner and have the capacity to scale up the operations in future to a potential of 15,000 manpower.
• Fiancial Express: “ICICI Bank selected Bhubaneswar for its eastern regioanal hub after choosing Hyderabad and Ahmedabad for the southern and western hubs, respectively, because of the initiative taken by the Orissa government,” said Kamath. He said the first phase of the hub would be fully operational in two years and the second phase will be completed in the next three years.
• Kalinga Times: In order to ensure availability of skilled local manpower, the bank has already started working in a partnership model with two universities in Orissa. In this regard, a separate MoU was signed between the bank and Utkal niversity on the occasion for offering various skill enabling and vocational courses in the domains of banking, finance and insurance. … Later in the day, the bank signed another MoU with KIIT University for running of an e-Learning Centre like the one to be run by Utkal University.
• Tathya.in: Naveen also asked Kamath to facilitate the Institute of Entrepreneurship Development (IED) into a national level Centre of Excellence.ICICI has played a crucial role in developing EDI at Ahemadabad to a national level institute.Kamath promised to look into the matter, said sources.

Tathya reports that ICICI Bank will sign an MOU with Orissa government to set up a call center and back office operation for banking and insurance. This center to be located in Infocity will eventually hire 15,000 graduates from normal colleges. In terms of the number of people they will hire, this is a big deal; much bigger than the overhyped POSCO or Mittal deals. ICICI Bank will not use our mines; will not pollute our atmosphere; will not displace people; and will only need 12 acres and yet will hire 15,000 people. Orissa should be going after more such companies and less of the metal and mining kind.

Notes:

• Earlier in April this year ICICI Bank made a similar announcement with respect to Hyderabad.
• In 2005 ICICI Bank had planned for the eastern hub to be in Kolkata.
• ICICI Bank is different from the BPO company ICICI Onsesource which is now renamed as First Source.
• ICICI bank recently launched the ICICI Knowledge Park in Hyderabad.

Tathya’s running headline said that ICICI’s CEO Mr. Kamath is visiting Orissa on the 26th.

Various news reports (New Indian Express, Sambada, Dharitri) mention that an integrated Titanium plant will be established in Chhatrapur at the cost of 2200 crores. This plant will be established by Sharaf agencies with the help of the Russian government.

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]