Orissa mulls rethink on MoUs with industries

At a time when Orissa's economy was on the back foot and the state had no big ticket industrial project to boast of, the state government used the MoU (Memorandum of Understanding) route to pull investors.

The gamble paid off initially as the state government was able to attract investments, mostly in mineral based industries, with a condition in the MoU that it would facilitate land acquisition and water allocation for these industries and also assured to push cases of mining lease with the Centre.

Orissa's MoU signing spree which began in 2004 almost continued unabated for over six years during which the state government signed MoUs with as many as 88 industrial players in sectors like steel and mines, aluminium, cement and ports.

But with mega industrial projects failing to make any headway and political as well as industry observers questioning the mad rush of the state to sign MoUs and the merit behind the move, the state government is now mulling to act with caution.

"We are certainly not going to sign MoU with every prospective investor who wishes to set up shop in the state. Priority would be given to the interests of the state and the project affected people before entering into MoU with any industrial player”, a highly placed official source told Business Standard.

"What is the need to sign more MoUs when our hands are already full with so many MoUs?'', asks another top official.

For the state government, it has been a formidable task to acquire land for mega investment projects like Posco and ArcelorMittal in the face of stiff protests from the land losers.

Also, of late, much hue and cry has been raised over the increasing diversion of river waters for industrial use.

These factors might have prompted the state government to adopt a selective approach in signing of MoUs in the future.

It may be noted that Orissa has earned the tag of an investors' paradise, attracting investments of over Rs six lakh crore.

The state government has inked MoUs with 88 industrial players so far including 50 in steel, 27 in power, three each in cement and aluminium and four in the ports sector.

The state-owned Industrial Infrastructure Development Corporation (Idco) has allotted 7428.30 acres of land to as many as 64 industries during 2005-2010. Out of this, 7138.2 acres constitute non-forest land with the remaining 290.10 acres being government forest land.

While the industries have paid Rs 98.84 crore towards non-forest land, they have forked out Rs 49.31 crore for government owned forest land in the said period. The maximum land (1657.71 acres) has been allotted in Angul district.

As many as 24,877 jobs have been created till now by the MoU signed companies out of which 17439 people engaged are within the state while the remaining 7438 have been recruited from outside the state.

Amongst the 17439 people engaged by the companies, 6124 are from the district where the project is coming up with the balance 11031 people being hired from other parts of the state.

Out of the overall figure of 24877 jobs, steel and mines sector has the lion's share at 21596 followed by aluminium at 2605, power at 324 and cement at 154.

The most number of jobs have been created by Bhushan Power & Steel Ltd (2235). Out of 2235 jobs, the people within the state have bagged 1120 jobs.