A different chorus at Orissa after Tata-Corus deal | india | Hindustan Times
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A different chorus at Orissa after Tata-Corus deal

The Orissa government is optimistic that the Tatas will not back out from the Kalinga Nagar project after the Corus deal, reports Soumyajit Pattnaik.

india Updated: Feb 01, 2007 19:01 IST

There is a different chorus heard in the power corridors of Orissa over the acquisition of Corus by the Tatas. Will Tata Steel now build the six million tonne green-field integrated steel plant at Kalinga Nagar with an investment of nearly Rs 15,400-crores after the Corus deal or will it meet the same fate as of the Gopalpur steel project for which Tata Steel had signed a MoU with Orissa government in August 1995?

The Orissa government is optimistic that the Tatas will not back out from the Kalinga Nagar project after the Corus deal. Steel and mines minister Padmanav Behera told Hindustan Times, "Tata Steel has signed a MoU for setting up a 6-mt steel plant at Kalinga Nagar and I'm confident that they will not back out after the acquisition of Corus. But if they do, then the value addition policy will be equally applicable to them." Under the value addition policy, the government is allocating iron ore mines to those industrial houses, which undertake a commitment to set up steel plants within the state. The government is following a policy of "no plants, no mines" and existing mining leases are not being renewed where the companies are not setting up plants. Behera added, "If Tatas do not build the plant at Kalinga Nagar, we cannot renew their existing iron ore mining leases under the value addition policy which is being equally applied in all cases".

There is apprehension over the fate of Kalinga Nagar plant as people of the state are constantly reminded about the fate of the Gopalpur Steel project, which was abandoned due to a number of factors. The Tatas had signed a MoU with Orissa government for the Gopalpur steel plant in August 1995, but the project could not take off despite the completion of the troublesome displacement and resettlement processes. In November 2004 when Tata Steel signed a MoU with the Orissa government for setting up the 6-mt steel plant at Kalinga Nagar, the press release issued by Tata Steel mentioned about the Gopalpur project. The Tata Steel press release said, "Tata Steel has also drawn up plans for development of Gopalpur region, where it is in possession of 3,200 acres of land acquired by it for its earlier proposed steel plant. It proposes to set up a technical training institute at Gopalpur and work with the state government to help set up a SEZ on a part of the land". 

When the MoU was signed on November 17, 2004 for the 6-mt Kalinga Nagar plant, Tata Steel managing director B Muthuraman had said, "Our first task now is to obtain all statutory clearances, with the help of the state government, as far as possible and start the work. We have undertaken a challenge of setting up the steel plant within 48 months from today, including the time required for obtaining the statutory clearances". But after twenty-four months, the boundary wall of the plant could not be completed, thanks to the stiff resistance of the local people. In fact, thirteen tribals lost their lives in police firing on January 2, 2006 when they were protesting against the boundary wall construction by Tata Steel at Kalinga Nagar.

A senior official in the steel and mines department said, "The government has drawn much flak after the Kalinga Nagar firing incident. We hope that the Gopalpur example will not get repeated again after Tatas have acquired Corus".

A senior Tata Steel official told HT, "There is no possibility of Tata Steel backing out from the Kalinga Nagar project. We have already placed orders for machineries. The acquisition of Corus will in no way affect the green-field project at Kalinga Nagar".