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Posco: Land hurdle up next

business Updated: May 03, 2011 01:40 IST
HT Correspondent
HT Correspondent
Hindustan Times
Highlight Story

The government on Monday granted approval to diversion of forest land for Korean steelmaker Posco's proposed 12 million tonne steel plant in Orissa, India's largest FDI project ($12 billion), that has been hanging in the air for over 5 years.

With this approval, the focus now shifts to the state government on how it manages the thorny issue of land acquisition.

The Posco steel plant will come up on 4,004 acres of land near Jagatsinghpur, one of India's poorest and least developed regions, with 3,500 acres belonging to the government and the rest with the public. http://www.hindustantimes.com/images/HTPopups/030511/03_05_11-buss23b.jpg

While Posco welcomed the approval, the sense of optimism was muted as the battleground transforms itself from the bureaucratic tables to farm land allegedly encroached by farmers, the latter a more intangible rival.

The Korean firm gave no indications when the plant would be up and running.

"We are happy with the approval and hope to start work soon," said Vikas Sharan, vice president, Posco India.

"We cannot start work immediately as neither are we in possession of the land nor is the land (with the government) contiguous."

The project, which will come up in three phases separated by three years each, will create 48,000 direct and indirect jobs. During the construction, 467,000 man years of employment will also be created.

Land acquistion will also be based on a comprehensive relief and rehabilitation package that recognises encroachers at par with land owners, a first in industry.

Even then, opposition to the project has been stubborn and refuses to ebb, an indication it has support at the grassroot level.

The main opposing organisation, Posco Pratirodh Sangram Samiti (PPSS), was undeterred by the green clearance for the project and is threatening to move court citing deprivation of rights.