After Posco failure, Odisha to calibrate JSW Steel's land need

Sajjan Jindal-led JSW Steel might have to settle for a smaller land parcel for its mega steel plant of 10 million tonne capacity proposed in Odisha. The steel company has asked for 4,500 acres of land near Paradip to install the shore-based steel plant in phases.

The state government, however, has decided to appraise this land requirement as modern, greenfield steel mills are usually more compact structures due to use of latest technology and this reduces the area. Besides this, acquisition of large patches of land in the state has been a sore point historically with local land losers and investors locking horns. Having burnt its fingers over the mega projects of Posco and ArcelorMittal that were mothballed primarily due to protracted land protests, the state government is acting with caution. ArcelorMittal aborted its 12 million steel plant in Odisha in 2013 primarily over land acquisition hassles and law & order problems at the chosen site. More recently, Posco wrote to the state government to surrender the land acquired for its project of equal capacity.

“New steel plants can manage with less area since they make use of more efficient technologies. The same can be the case for JSW Steel. Though they have asked for 4500 acres of land, we feel the projected land requirement can be rationalised. But, the state government, on its own cannot do it due to lack of expertise. So, we are thinking of hiring an agency like Mecon,” said a senior Odisha government bureaucrat.

Last week, JSW Group chairman Sajjan Jindal called on the chief secretary and other key officials. The state government has asked JSW Steel to submit the detailed layout of the land and how it intends to develop it.

The High-Level Clearance Authority (HLCA), the highest body to approve investments in Odisha has already given its nod for the JSW Steel project. The company has pledged an investment of Rs 50,000 crore. The steel plant is expected to go on stream in four years from zero date and when fully operational, it is expected to create around 50,000 jobs. 

To optimise raw material costs, JSW Steel has committed an investment of Rs 3,700 crore on a slurry pipeline for transporting 30 million tonnes of iron ore each year from Joda to Paradip. This project, too, has got the HLCA’s nod.

To secure iron ore supplies for its integrated steel project, the company has pitched for a 50-year-long-term agreement with state-owned Odisha Mining Corporation (OMC) to supply 30 million tonnes per annum of iron ore fines at IBM (Indian Bureau of Mines) declared price. JSW Steel has suggested that OMC may engage a Mine Developer cum Operator (MDO) on long-term basis to develop its large mines like Gandhamardhan and Dubuna.

Though the state government officially maintains that the site for JSW’s steel project is not zeroed in, the company has clearly asked for the land where Posco project was supposed to come up. JSW Steel has asked for 2,700 acres of land that has already been acquired for the Posco project. The company desires that this patch of land should be transferred by the state government after constructing the boundary wall. Aside from the steel plant, the company has asked for around 150 acres of land for the township and 90 acres for rehabilitation & resettlement (R&R) colony. The steel company has urged the state government to transfer all the land parcels at the rate of Rs four lakh per acre.

Land issues

• JSW Steel had approached Odisha government to allott 4,500 acres near Paradip for setting-up its 10 million tonne steel plant in the state
• The company may get a smaller land parcel as the Odisha government is of the view that new steel plants can be set-up in smaller land parcel as they are powered by more efficient technologies
• JSW’s land acqusition request is also being reviewed by the government given the state’s long history of large land patches being a bone of contention between land owners and potential investors