As POSCO hits green roadblocks, the mega project seems doomed

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Rallying point Local people have opposed the plant since the beginning
Photo: Reuters
Troubled waters Policemen in the Jagatsinghpur area in 2007 after a protest
In limbo Villagers who were to be displaced by the $12 billion steel giant
Photo: AFP

THE ODISHA government is trying hard not to sound defensive, after the Meena Gupta Committee report pulled it up for violating the local people’s forest rights while giving the nod to POSCO for setting up its proposed $12 billion steel plant. Earlier, a joint committee of the Ministry of Environment and Forests (MoEF) had reached the same conclusion, and reported several irregularities.

Odisha’s Revenue and Disaster Management Minister Surya Narayan Patro, however, insists that he still does not see it as a “setback”. In her report, the panel’s chairperson, former environment secretary Meena Gupta, had not asked for the clearances to be cancelled outright; only for a fresh comprehensive environmental impact assessment (EIA) and additional conditions to be imposed on the company, if needed. The panel, which was set up to review the POSCO project, had submitted two reports to the Minister for Environment and Forests Jairam Ramesh. Three of its members even demanded the cancellation of the clearances given for the plant and the South Korean steel major’s captive port projects. Even though there was consensus among the committee members that the locals’ forest rights had been grossly violated, four members felt that a fresh review of the contentious issue would be good enough for a start.

The report comes right after the MoEF’s rejection of another proposal: the Niyamgiri mining project

POSCO, which signed a memorandum of understanding (MoU) with the Odisha government in July 2005 for setting up the 12 million tonne steel plant in Jagatsinghpur, has still not taken possession of any of the land in the project area. All attempts to acquire it have been stonewalled by the agitation led by the POSCO Pratirodh Sangram Samiti (PPSS) whose leaders have hailed the Gupta panel report and say they plan to intensify their movement. “The report has vindicated our stand that the government bypassed all laws. By now, both it and the company should have realised that the people do not want the project. If it is not shifted elsewhere we will make sure that POSCO is thrown out of here,” PPSS president Abhay Sahu told TEHELKA.

Meanwhile, company officials are said to be miffed with the government for delaying the project by five years. Though unwilling to be quoted at this stage, they privately say they do not rule out the possibility of the project moving out of Odisha if things don’t work out their way.

Significantly, the report comes in the wake of the MoEF’s rejection of another big proposal in Odisha, the Niyamgiri mining project, that was seen as crucial to the fortunes of mining giant Vedanta Resources PLC. Vedanta desperately needs bauxite to keep its million-tonne alumina refinery at Lanjigarh in Kalahandi district running. Currently, the refinery is being fed by bauxite sourced from Chhattisgarh, Gujarat and Jharkhand.

Chief Minister Naveen Patnaik, who has discussed the report’s fallout with senior officials, including Chief Secretary Bijay Kumar Patnaik, is a lot more worried than the others. During his last visit to Delhi about a month ago, he had reportedly been assured by Prime Minister Manmohan Singh that the Centre would do its best to push the POSCO project. “Patnaik had then taken Singh’s support for granted, as POSCO is a showpiece project not only for Odisha but the entire country. But MoEF’s attitude has left the state government frustrated,” according to a highly placed official from the state’s Steel and Mines Department who did not want to be identified.

The chief minister plans to approach the PM again before his visit to Seoul for the G-20 summit

IT IS learnt that Patnaik, whose government is expected to give its opinion on the report to the MoEF before the Forest Advisory Committee (FAC) subjects it to scrutiny on October 25, plans to approach the PM again. That could happen before Singh visits Seoul next month to attend the Group of 20 summit, where his South Korean counterpart is likely to bring up the current status of the POSCO project.

The opposition parties, too, are gearing up to get tough with the state government as it finalises its reply to the MoEF. “The committee has exposed the Naveen Patnaik government’s design of favouring big corporate houses at the people’s cost. Neither we, nor the people of the state, are going to tolerate this,” warns state BJP president Jual Oram, who had a running battle with the chief minister over the POSCO project when his party was an ally of the Patnaik government.

While the report has raised a big question mark over the project’s future in the state, there is also a growing concern in the ruling establishment over the Orissa High Court’s rejection of the state government’s recommendation for granting a mining prospecting licence to POSCO in the iron-ore-rich Khandadhar area of Sundergarh district. This concern arose after the court asked the government to reconsider it when another company, which had applied for a similar licence in the same area, protested. Incidentally, this is also the second time that the government’s attempt to grant POSCO a prospecting licence for the area has been scuttled. The first was in 2006, when the Central government had directed the state to conduct a fresh hearing of all the applicants involved in the project.

So this begets the all-important question — what happens next? Will there be more delays? Or more protests?

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