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Protests may hit industrialisation

india Updated: Oct 15, 2007 12:31 IST

Violence at proposed industrial sites and kidnappings of company officials may upset mineral-rich Orissa's grand plans of attracting foreign direct investment (FDI) and setting up big industries in this eastern Indian coastal state.

The kidnapping and subsequent release of one Indian and three South Korean officials of steel major Posco in Jagatsinghpur district Saturday was only the latest in a series of such incidents.

"This sort of activity will de-motivate investors and have an adverse impact on foreign investments, which will not be in the larger interest of the people and the state," Posco spokesperson Sasanka Patnaik told IANS.

Orissa has been trying to attract FDI and invite overseas companies. It has signed in the past five years at least 62 deals with domestic and foreign companies that cover establishing 46 steel plants, three aluminium plants and 13 thermal power plants.

If all the deals materialise, it would mean investments worth more than Rs 3 trillion in the state. But coming in the way are protests from local residents, who feel the new projects threaten their livelihood.

"It sends a wrong signal outside," said Santosh Mohapatra, vice president, eastern India, Confederation of Indian Industry (CII).

Besides Posco, other big projects are also facing similar problems, an industry expert said.

The state government signed a deal with London-based global steel magnate Lakshmi N Mittal in July this year to set up a 12-million tonne steel plant in Keonjhar district.

The project is estimated to be the second largest FDI in the country. But it is facing strong local opposition, as a result of which the government has not been able to acquire land for the plant.

The situation is similar for other big projects proposed by Tata Steel and other companies.

At least 13 tribals were killed and several injured when police fired at hundreds of tribals in the Kalinga Nagar industrial complex, about 100 km from state capital Bhubaneswar, January 2, 2006. The tribals were protesting land acquisition by the Tatas.

"The state government is trying to resolve the issues and create a better environment," Steel and Mines Minister Padmanav Behera said but admitted that incidents of violence and local opposition may have its bearing on people investing in the state.

Posco, one of the world's biggest steel makers, signed a deal with the Orissa government in June 2005 to set up a steel plant near Paradeep port in this coastal district by 2016. It is the single largest FDI in India.

However, over 20,000 people from around 15 nearby villages, including Dhinkia, Gada Kujang and Nuagaon, have been protesting the project, saying it would take away their homes and their betel-leaf farms, the main economic activity in the area.

Activists opposing the proposed plant in their region Saturday abducted four Posco-India executives - K.S. Choi, S.H. Nam, T.J. Ahn and Deepak Ojha - from the proposed site of the plant and released them after almost six hours.

They were released as the local administration gave a written undertaking to villagers that Posco officials would not enter the proposed site again.

It was not the first case of abduction of officials from the site. In the past two years, anti-Posco activists have detained at least a dozen officials of the company, including seven South Korean nationals, a district police official told IANS.

At least 100 instances of Posco-related violence have been reported at the Kujanga police station in the same period but police have not taken any action against protestors fearing more trouble, he said.

Orissa is rich in natural resources and has a 480-km-long coastline along the Bay of Bengal. It boasts of a wealth of minerals, including 1.6 billion tonnes of bauxite, making up about 70 per cent of the country's reserves. It also holds 24 per cent of India's coal reserves.