|
| Land trouble puts mega-steel projects on slippery ground |
| Ishita Ayan Dutt / Kolkata Oct 09, 2009, 00:54 IST |
|
Land, and not mines, has emerged as the biggest stumbling block for steel projects, threatening to derail the government’s target to boost the capacity from 55 million tonnes now to 124 million tonnes by next year.
So when ArcelorMittal Chairman L N Mittal said on Monday that the delay in land acquisition was “unacceptable,” he was only echoing the concerns of most domestic and foreign steel majors operating in India.
Ask Posco, the Korean steel giant that has been fighting the battle for land since 2005.
Steel Secretary P K Rastogi says, “Land is the biggest issue holding up projects and the companies and the state governments concerned will have to solve it.” Land is a state subject.
In the past four years, there has been some progress in allocation of iron ore and coal mine — the two key raw materials for steelmaking. The memoranda of understanding for the mineral rich states of Jharkhand, Orissa and Chhattisgarh started pouring in from 2005. Since then, many steel companies, JSW Steel, Tata Steel, Essar Steel, Tata Metaliks, and even ArcelorMittal have bagged either coal or prospecting licence for iron ore.
But the land wrangle still continues, largely inflamed by political parties and Naxalites.
Consider this: Jharkhand accounts for 40 per cent of the new capacities announced but the rehabilitation and resettlement (R&R) policy is yet to be ratified. A Tata Steel spokesperson said, “We are still awaiting the R&R policy from the Jharkhand government.” The company announced a 12 million tonne greenfield steel plant in Jharkhand in 2005.
In Chhattisgarh, where Tata Steel is setting up a five million tonne plant, it has received a prospecting licence for iron ore, but land acquisition for the project announced around the same time as Jharkhand started only a year back. For its Orissa project, Tata Steel signed the agreement in 2004, but has been able to move only 50 per cent of the families from its project site since possession.
A steel company official said, “Today the biggest roadblocks are water and land. Raw material can be transported.”
But there too the companies are handicapped. Tata Metaliks Managing Director Harsh K Jha says “We need much more robust infrastructure for transportation. The Railways will have to beef up.” Tata Metaliks pulled its steel project out of West Bengal on grounds of land acquisition issue.
It is not just infrastructure that is being able to keep the projects in the mineral-rich states. These states ensure that the value addition is done within the state — that is the basic understanding. Hence, companies are willing to wait.
| MISSING LINKS |
| Project |
Capacity
(million tonne) |
Land status |
Raw material |
| Tata Steel (Jharkhand) |
12 |
Jharkhand yet to come
up with R&R policy |
None yet |
| Tata Steel (Orissa) |
6 |
50 per cent of people yet to
move from project site |
None yet |
| Tata Steel (Chhattisgarh) |
5 |
Land acquisition started
a year ago |
PL* (iron ore) |
| JSW Bengal |
10 |
Land in possession |
Coal blocks |
| JSW Jharkhand |
10 |
Land identified |
Coal, iron ore |
| Essar Steel (Orissa) |
12 (pellet)
+ 6 (steel) |
Land for first phase |
None yet |
| Essar Steel (Chhattisgarh) |
3.2 |
Land being acquired |
PL* (iron ore) |
| Posco India |
12 |
Yet to get land |
Litigation in state |
| ArcelorMittal (Jharkhand) |
12 |
Land being acquired |
Coal, iron ore |
| ArcelorMittal (Orissa) |
12 |
Land being acquired |
Coal |
| Bhushan Steel (Bengal) |
2 |
Land notification |
None yet |
| * Prospecting licence |
Essar Group Director Jatinder Mehra says, “Land is a major issue but companies can wait around and sort it.”
Essar has received land in Orissa for the first phase of its project in Orissa though in Chhattisgarh the company is still in the process of land acquisition.
Ironically, one of the more fortunate projects is Sajjan Jindal-promoted JSW Steel’s 10 million tonne plant in West Bengal, the state which is now known better for its most violent protests against land acquisition. The company has bagged 5,000 acres for its projects and the requisite coal mines, and the company’s joint MD and group CFO Seshagiri Rao says banks are increasingly harping on land and satisfactory arrangement for raw material.
|
|
|
|
|
|
|
|
|
|
 Read Business news in |  |
|
|
|
|
|
|
Advertisements |
|
|
|
|
|
|
|
|
|
|
Content Guide
