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Like many fellow reporters in Orissa, I too suffer from Posco fatigue and am really at a loss when someone asks me about the future of the eight-year-old embryo which has been struggling to attain a full-fledged life. Will diplomatic pressures work? Can the project take off in the face of such stiff, reason-based opposition by the locals and civil society? Will it need a gory surgery of the Kalinga Nagar kind to liberate it from the walls of the womb?
I keep my fingers crossed.
Ever since the South Korean steel behemoth signed an MoU with the Orissa government in June 2005 for a $12 billion port-based integrated steel plant project, the drama over its implementation has seen so many twists and turns that never seem to end. And there is no hint yet as to when really the denouement will arrive. That explains why Posco is not celebrating even after the central and the state governments were generous enough to grant the much-delayed green clearance for its steel plant near Paradip port.
The obvious reason behind the great hurry is South Korean president Park Geun-hye’s four-day visit to India, on since January 15. But is it only that? Any grant of big concessions to private players ahead of elections is bound to arouse suspicion, however far-fetched it may sound. One surely needs to know what made the governments in Delhi and Bhubaneswar rise from their deep slumber suddenly and act in unison. There is good reason why one tends to smell a rat every time a government goes out of its way to bat for a particular big-ticket project. When the MoEF ordered a halt to the land acquisition drive for the Posco project in 2010, the Orissa government did not react. But when the Centre rejected the Stage 2 forest clearance to Vedanta’s Niyamgiri mining project, the ruling Biju Janata Dal declared war against the UPA government and even staged a protest rally in front of the Vedanta alumina refinery near Niyamgiri, accusing the UPA and Rahul Gandhi of conspiring against Orissa.
One does not know what inspired the new boss of the MoEF, Veerappa Moily, to revisit the Posco files that were gathering dust and grant green clearance to only one component of the mega project—the steel plant. But what begs an answer is: why did the minister allow Posco to segregate the integral components of the huge project? Although the steel plant is the core component, the Posco project includes a captive port, a captive mine, a power plant, two townships, railway link, water supply channels and so on.
Why was POSCO not asked to wait till it gets clearance for each of these segments and not rush into construction at its controversial plant site? The MoEF says the steel plant was granted green clearance only after it was delinked from the port project. But why accept such clever ‘delinking’ meant to dodge green laws?
Posco officials have time and again told us that the captive mine and the captive port are non-negotiable. They have also refused to accept an open offer from the Paradip Port authorities, who are willing to give them two dedicated berths for their use. What happens if the port proposal fails to get green clearance? Or do they take it as fait accompli? If Posco believes it can get away with this delinking technique, it may be inviting undue trouble.
One question that has gone unanswered is: why bring fdi in steel when we have good steelmakers?
The Niyamgiri mining project is a great recent example. Vedanta had set up its Rs 5,000 crore alumina refinery at Lanjigarh by delinking it from its mining project in Niyamgiri hills next door. But that boomeranged when the 12 gram sabhas of the area, which met under the direction of the Supreme Court, dismissed Vedanta’s mining project outright. More recently, the Supreme Court, during the hearing in the coal block allocation scam, has made it clear that big investments made in the coal blocks by prospecting parties in anticipation of the full and final clearance cannot be used as an argument against cancellation of the coal blocks. This money, the learned judges said, will only go down the drain.
But all that does not seem to have any effect on the MoEF bosses. Ironically, the same ministry that rejected Vedanta’s claims over the ‘delinked’ Niyamgiri mining project has now given the go-ahead to Posco’s ‘delinked’ steel plant. Double standards have been the hallmark of the MoEF. The Forest Rights Act applies to Vedanta’s Niyamgiri because the local tribal people’s rights have to be respected. But when it came to Posco, the rights of the Other Traditional Forest Dwellers, the second category of people who enjoy special rights under the FRA, were simply overlooked.
Moily has been saying the panchayats will decide the fate of projects coming up in their respective areas and they have the right to reject. One wonders why the same yardstick has not been applied to the Posco project area, where panchayats have passed resolutions objecting to the location of the proposed plant and port. Despite recorded evidence, the state government told the Centre that the panchayat resolutions were fake documents and the Centre accepted this “in good faith”.
What is it about this big steel project that would ‘change the face’ of Orissa and facilitate India’s growth as a superpower in the international steel bazaar? If the Posco project is indeed for the larger public good, why is it that it has failed to win the confidence of the people it promises to benefit? And why have the governments at the Centre and Orissa—which have been referring to it in glowing terms—taken so long to accord it the necessary approvals and grants?
The devil is, in fact, in the details. There isn’t much scope to go into all that in this article. But let us ask ourselves certain basic questions. First of all, why should India look for foreign direct investment in the steel sector when 90 per cent of its requirements for various steel products are being met by domestic producers, which include world-class steel makers? If we are worried about catering to the niche segment in the steel market, the kind of 12 million tonne steel plant that Posco is trying to push through will surely not fill that void.
There is no doubt in anybody’s mind that Posco is in Orissa because it can lay its hands on huge amounts of high-grade iron ore at a throwaway price. If it gets a captive mine in Khandadhar, it will get super grade iron ore at the rate of Rs 1,200-1,300 per tonne (including the ad valorem royalty, extraction and transportation cost), which is by all accounts Rs 2,000-2,500 less than the price in the open market. The profit that the company would make on the ore alone would be not less than two times the total amount it promises to invest in India.
There is nothing wrong in that, you would say, because other steel makers have also been enjoying that privilege for years. However, although it may sound a tad jingoist and protectionist, one would like to know: what are the pressing reasons to assist Posco in getting an edge over our desi steel makers and at this point in time? Thanks to the series of mining scams that have surfaced, there is greater public and media scrutiny now. The overall national consensus is that our scarce mineral resources should not be exposed to plunder and that the exploitation of minerals must be regulated in a transparent manner. So, why do we still have to grant prospecting and mining licences to private players outside the auction route?
However, one must give the devil its due. In this long and exacting game of patience, Posco has beaten everybody else, hands down. Even in the face of a host of obstacles like an aggressive agitation by the Posco Pratirodh Sangram Samiti (PPSS) at the proposed plant site, an insouciant administration, long-drawn court cases and problems like acquiring land as well as official clearances, the company has steadfastly refused to call it quits. You can describe this as a great example of perseverance, doggedness and an exceptional sense of commitment if you like.
Or, you can also call it the great survival skill of a predator who won’t give up until the prey is between its jaws!
(Sampad Mahapatra is a senior journalist based in Orissa.)