Even the state government's contention that Posco's project will lead to massive inflows of Rs 89,000 crore (in 30 years) to the Centre in the form of various taxes and another Rs 22,500 crore to the state seems questionable. As the MoU states: "The government of Orissa shall recommend to the central government and facilitate granting of 'special economic zone' status as required by the company." If true, Posco will save huge sums that it would have to pay as various taxes. Therefore, the inflows to both the Centre and the state would be much lower than the estimated figures.
What's worse is that major steel players have envisaged setting up mega steel projects in the same geographical area as Posco, but haven't gone ahead. An ex- sail employee admits that the psu had plans to set up a steel unit in the same region way back in the 1980s. "But we found that the Orissa coastal areas are prone to regular cyclones and our experts felt that the huge blast furnaces may not be able to withstand such forces. However, technology has changed in the past two decades," he explains.
It seems the lessons that we have learnt in this 15-year reforms journey have been conveniently forgotten. Whenever it comes to mega projects—whether they are promoted by MNCs or large Indian corporates—the Enron episode has proven that there's a need for public debate to inculcate greater transparency. Agrees Prabhat Patnaik, professor, JNU: "All deals like Posco that have inter-generational effects should be debated and sanctioned by the legislature. There are no checks and balances in the MoU with Posco." So, will Posco really become another Enron?
