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BW Businessworld

The Ground Realty

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Stung by criticism that tribals and farmers are being uprooted to make way for industrial projects, the Orissa government has scaled down its land acquisition drive. Companies too have begun cutting down their project size to make it easier to go on stream.

Take, for instance, Posco. The Korean steel giant had faced opposition from local farmers in Jagatsinghpur district during earlier land acquisition drives. The new MoU being negotiated (the earlier MoU has expired) envisages a lower land acquisition target of 2,700 acres compared to the earlier plan of 4,004 acres. Posco will also lower its plant size from 12 mtpa to 8 mtpa (million tonnes per annum) to be set up with an investment of Rs 54,000 crore.

According to Pradeep Kumar Jena, chairman and managing director of the Orissa Industrial Infrastructure Development Corp. (Idco), 2,100 acres have been acquired and another 600-700 acres will be acquired in a fresh drive. He says there will be "no forced acquisition" under the new policy. Idco is in charge of acquiring and developing land for industrial projects in the state.

At the Posco site, the policy seeks to exclude the land belonging to Dinkia village, where betel leaf farmers have been leading the resistance. "We don't want Posco in this area under any circumstance," says Abhay Sahu, president of the Posco Pratirodh Sangram Samiti. 

Tata Steel's 6 mtpa Kalinganagar project, which was to go on stream in 2009, has also been scaled down to 3 mtpa for the first phase; the company has decided to begin production even though it has got hold of just 2,200 acres out of the 3,400 acres it has acquired on paper. Fourteen protesting tribals were killed in police firing on 2 January 2006. The outrage and  blockades thereafter halted the project till 2009.

A recent visit to the Kalinganagar revealed that work was proceeding apace at the plant site. According to a company spokesperson, Tata Steel plans to go on stream with 3 mt of flat products in the first half of 2014.

Tribal leader Ravi Jharika of the Visthapan Virodhi Jan Manch claims that four of the 11 villages — Chandia, Baligotha, Gobargathi and Belorhuri — are opposing land acquisition by Tata  Steel. According to a company spokesperson, only 900 of the 1,165 families facing displacement have accepted the rehab package. On the ground, a temporary chain-link fence demarcates the plant site from the rich green fields of Chandia village. The firm has accepted a smaller land component; it hopes to acquire the remaining land after the first phase goes on stream. It also plans to raise the plant size to 12 mtpa.

The new policy also seeks to strictly keep out irrigated land from being acquired for industrial use. Idco's Jena says the state government has rejected a proposal by Sesa Goa for a mining project in Orissa's Rayagada district. "Our success depends on the price we pay for land. Industrial groups have realised that land acquisition is difficult and are now agreeing to pay larger compensation packages, sometimes two-and-a-half times the official acquisition rate."

(This story was published in Businessworld Issue Dated 16-07-2012)