[Reader-list] POSCO write up
Asit asitreds
asitredsalute at gmail.com
Thu Feb 14 11:13:19 IST 2008
"Over Our Dead Bodies" A Report from the Barricades.
A brief note on the Anti POSCO struggle in Orissa
The crisis of capitalism and the collapse of the Brettonwood system:
The coming in of Neo-Liberal Economics in the form of
"globalization", read imperialism, has led to the intensification of
imperialist intervention solely because of capital's ruthless drive
for accumulation and profit maximization. This incessant drive is
forcing developed capitalist countries in an ever increasing search
for cheap labour, cheap resources and captive markets. Ever since the
collapse of the Soviet bloc and the counter revolutionary reforms in
China, the space allowing imperialist interventions with impunity has
increased manifold. In the recent past the globe has witnessed
numerous violent and insidious so called "non violent" interventions
across the globe, i.e Nicaragua, Granada, Panama, Tahiti,
Afghanistan, Argentina, several countries of Africa. The most
striking example of early 21st century accumulation through direct
occupation and even genocide as is happening in Iraq. These
interventions have upset regional and national economies, disposed
millions and created areas of unrest and strife; the pauperisation of
Latin America, hunger famine and ethnic strife in Africa and the
establishment of compradors, outright World Bank puppets,
dictatorships/client regimes and military juntas such as in India,
Pakistan, Saudia Arabia, Kuwait, Philippines, South Korea,
Bangladesh and Afghanistan.
Interventions from imperialist agencies such as the World Bank, IMF,
WTO, The ADB and NGO's and donor agencies etc. have so far been
effective in imposing a structural shift within the third world
economies. This shift from a relative notion of self reliance through
"import substitution" industrialisation, food self sufficiency
towards dismantling their welfare structures and imposing an outright
commodified imperialist culture heavily dependant on the
privatization of services and the commodification of natural
resources has only resulted in further marginalisation of the people
and increasing inequalities.
In the context of India, these imperialist interventions are being
implemented by the comprador elite which has taken on the task to
facilitate the easy entry of capital. The task for capitalist
intervention has been through these compradors who divert the people
attention from issues confronting their immediate life and
necessities through strengthening feudal oppression and captivating
the middle classes within an illusionary web of crass consumerism and
cash nexus. Because of this ruling comprador class, imperialist
capital has at its disposal an unprecedented quantity of cheap
mineral resources, land, labour, youth and government funds. In India
we can see the rapid increase in the private service sector, where a
huge number of our youth are being lured into working as semi-
slaves in late night call centers and BPO's, thousands of which
sprung up overnight only because of rising labour costs in core
capitalist countries.
With developed nations facing rapidly depleting resources, rising
unemployment, high costs of unsustainable consumerism and falling
productivity their ruling classes are compelled to intensify their
economic, cultural, political and armed interventions in developing
nations. This form of brutal primitive accumulation has also given an
impetus to several centers of resistance across developing nations.
In India we can see an intensification of the struggles of the
peasantry against forced displacement taking place across the length
and breadth of India, especially in those resource rich regions where
the levels of neo colonial extraction are high and brutal. A case in
point would be the states of Jharkhand, Chattisgarh and Orissa.
Taking the particular case of Orissa we can see that since the
colonial period there have been a huge number of imperialist
interventions and parallel struggles being waged by the peasantry on
the issue of displacement from forests and farm lands. Orissa is the
continuous target for loot by the imperialist powers, finding within
an amicable ally in the comprador ruling class puppet such as Naveen
Patnaik. Nevertheless, there have been several heroic tribal
uprisings against the earlier colonial plunder by martyrs such as
Laxman Nayak in the early 20th century and in the recent years we can
see the emergence of several struggles in Kashipur, Hirakud,
Kalinganagar, Lanjigarh and Jagatsingpur (Anti POSCO). It is in
Kalinganagar where resistance by the adivasi peasantry changed the
very contours of resistance across India. The Kalinganagar struggle
marks a break with the earlier existing forms of Gandhian/Sarvodaya
and other liberal forms of protest as organized by various NGO's etc
which looked at anti displacement resistance within the structures of
official grievance redressal mechanisms of the Indian state which
ironically was the primary agent for this imperialist loot. Even
while co-opting and diffusing people's anger, these interventions
were found inadequate when faced with the wrath and greed of
rapacious capital and the armed might of the comprador state. On the
contrary, the mass militant resistance at Kalinganagar, for the first
time refused to negotiate and engage with the state on its assumed
legalistic terms of dialogue which also restricted and set the terms
for protest within the ambit and ideology of the ruling classes on
how it perceives and allows dissent. The activists of the
Kalinganagar Vistaphan Birodhi Janmanch took a stance of no
rehabilitation no compensation and no forced displacement from their
lands which have now become an immense source of inspiration for
other anti displacement movements across India.
The anti POSCO people's resistance has been going on in parts of
Jagatsinghpur district of Orissa against the steel plant and captive
port proposed in the area. This struggle has been on since July 2005,
a month after the Memorandum of Understanding regarding the project
was signed between the Government of Orissa and Pohang Steel Company
Limited (POSCO). In many ways the anti POSCO struggle is a logical
outcome of the mass peasant resistance at Kalinganagar.
The Economy of the region
There is need to counter the misinformation being disseminated by the
ruling classes regarding the economy of the region. According to the
government the people of this area are very poor and only subsist as
marginal farmers. Nothing can be further from the truth. According to
a fact finding team's survey done in the area[1];
• The local economy is a thriving, labour-intensive one, based on
agriculture and fishing. The economy is also sustained, apart from
staple crops such as paddy, coconut etc., on cash crops such as
betel, cashew, supari and kewra. Fishing and pisiculture are also
prominent sources of livelihood. Most of these sources provide income
and employment throughout the year.
• The uniqueness of the betel vine cultivation economy, due to the
typicality of the geographical and topographical features like soil,
was highlighted repeatedly by everybody the Team interviewed. It is a
thriving, highly labour intensive activity which provides income
throughout the year, supporting and providing work to a wide age
group of people—from the young to the old—who are engaged in various
productive tasks related to cultivation, plucking, transport and
marketing of betel leaves. The locals are certain that they will not
be able to get most of these jobs at the POSCO factory because they
do not have the requisite skills. Even if they do manage to get a few
of these jobs, they emphasize, the steel project and port will not be
able to provide with the kind of secure livelihood they currently enjoy.
• The Jatadhari river, estuary and the forest resource base play a
very important role in supporting the cultivation, fishing as well as
household needs like fuel wood etc. In the late 1960s, Loknath
Chaudhury, a local leader and former CPI(MP), led a struggle for
transfer of much of the common land in the area, some of which was
already under betel vine, from the revenue records to the Forest
Department so that afforestation initiatives could be carried out to
provide a natural barrier for protection of villages from impacts of
cyclone and to provide for the basic needs of firewood and stalk for
betel vine cultivation. Finally the land was transferred to the
category of gramya jungle or community forests.
The MOU
Similarly, concerning the MOU, both the Centre and the Orissa state
government have been extremely secretive about the terms and
conditions. The above mentioned fact finding team also investigated
and found startling facts about the deal.
ON June 22, 2005 the State of Orissa signed a Memorandum of
Understanding (MoU) with the South Korean Steel giant—Pohang Steel
Company Limited, also known as POSCO. Touted as India's largest
Foreign Direct Investment (worth Rs 52,000 crores) the project
involves building of a 12 Million Tonnes Per Annum (MTPA) integrated
steel plant and a captive port in the Ersama Block of Jagatsinghpur
district, Orissa.
As per the MoU, based on the needs of the "Steel Project", the
Company will also develop and operate the following infrastructure: [2]
Mining facilities in the areas allocated by Government of Orissa/
Government of India:
i). To help POSCO produce steel, the Orissa government has promised
recommend to the Union government to hand over captive coal mines to
POSCO until it is ready for mining of its coal block.
ii). To make steel POSCO needs 600 million tonnes of ore from the
government of Orissa. Iron Ore is available at Rs. 2000 to Rs. 2600
per ton. Discounting extraction costs at Rs 400 per ton, the state
government is subsidizing POSCO at Rs. 96000 crore per year in only
the use of iron ore. And this does not include the amount it may take
away. The MoU is set up to allow extraction for 30 years with
extension possible for 20 years. In addition, unspecified amounts of
chromium and manganese will also be provided to POSCO. Dolomite and
limestone will also be made available at subsidized rates.
Communications and Transport: Road, rail and port infrastructure
will be provided with government help, including the dedicated
railway line from the mine-belt to Paradeep. POSCO will also
construct its own port at Paradeep. The government will also
construct, a railway line from Haridaspur-Paradeep and Bansapanl-
Paradeep for export of POSCO company's iron ore.
Integrated township: The state government will provide about 6500
acres of land for the plant site in Paradeep. There is no statement
regarding the price that POSCO will pay for this land. In addition,
the state government has agreed to provide about 20-25 acres of land
in Bhubaneswar and hand it over to POSCO for its office. At what
price the company will take this land has not been mentioned.
Water supply infrastructure: According to the MoU, the Government of
Orissa is to permit withdrawal and use of water (near- about 12
thousand to 15 thousand crore liters) from the Mahanadi barrage at
Jobra and Naraj in Cuttack for construction and operation of the
"Overall Project". Concerns have been repeatedly raised over the past
two years by citizens of the area and technical experts that this
would severely impact the drinking and agricultural water supply of
Cuttack and neighbouring four districts. The MoU also promises water
to POSCO from the Mahanadi from Jobra barrage. For free. The MoU is
silent about the quantity of water to be provided.
Revenue: In order to increase profits for POSCO, the government of
India has given Special Economic Zone (SEZ) to POSCO. The company
will not have to follow various trade, labour and economic
regulations. None can compel POSCO to even pay tax in view of
liberalised regime prevalent in SEZs. As per current understanding,
in 30 years time, the government of Orissa will get Rs 22,500 crore
and the central government Rs 89,000 crore i.e. a total of Rs
1,11,500 crore in the form of tax revenue. This works out to Rs 3,700
crore income per annum. This is less than the amount Orissa is paying
POSCO in subsidies only for Iron Ores.
Administrative support: In addition, senior IAS officers of the state
will be put at the service of POSCO for implementation and
coordination. It is mentioned in the conditionality also that if
POSCO wants, it can accept foreign and indigenous private players as
partners, whenever it finds necessary. The local administration is
acting in close collaboration with the Ersama MLA Damodar Rout,
(General Secretary BJD). Adept at mobilising Goondas, Damodar Raut,
with POSCO officials, the district collector, have been gathering
their forces, all of this is monitored by Priyabrata Pattnaik, a
notorious IAS officer whose action of applying for mining contract
for the officers' club named 'Bhubaneswar Club' was recently exposed.
Incidentally Priyabrata Pattnaik is also the Govt. nodal officer for
the POSCO. Even the present Collector, Mr. Pramod Kumar Meherda has a
history of repression against people's democratic protest, while
collector in Rayagada district, he unleashed a reign of repression to
silence the Kashipur Movement, against the proposed Utkal Alumina
bauxite mining and Alumina plant of the Birlas.
The Struggle:
The modus of the intervention by the Indian state to forcibly evict
large mass of the peasantry from their farmlands and forests has also
undergone a radical change in the last year. In Nandigram the state
first used its armed forces to try and defeat the democratic
resistance of the people, failing which, the ruling party sent its
armed cadres to brutally suppress the dissent. On Nov 29th 2007 it
was the BJD in Jagatsingpur which made the use of goons to terrorize
those involved in the anti POSCO struggle. This is an alarming trend
seen across India, the Congress and NCP in Maharastra has allowed
Reliance to use its goons in intimidating the anti SEZ movement in
Raigarh, the BJP has been using the Bajrang Dal to forcibly acquire
land for SEZs in Gujarat, the BJP has repeated this using the land
mafia to forcibly acquire land for an SEZ near Indore, in Kerala the
CPI(M) once again used its armed cadres to evict adivasis in Wynad,
the BJP and Janta Dal(S) used goons to evict people from Bangalore
and other SEZ's spread across the state and the list is endless. What
marks the danger of this current mode of forced displacement by the
state is its increase dependence on using extra constitutional means
and the hiring of goons and lumpen elements to suppress the
democratic struggles and voices of the people.
In POSCO the stakes are very high, not only for the resistance being
organized under the banner of POSCO Pratirodh Sangram Samiti, but
also for the political and business interests. POSCO is a project
which's cost is estimated to about Rs.52,000 crores; flush with
money, the POSCO management in open connivance of the ruling class
elite is desperate to please their imperialist masters, while the
corrupt bureaucracy jump like hungry dogs at even the small crumbs
POSCO throws at them.
After the goons of BJD and POSCO drove the agitators from Balitutha
in the evening of 29th November 2007, within a period of one hour the
police entered Nuagaon village, erected road blockade at Balitutha
and establishing a camp at the same site where the protesters were
sitting for the last 2 months, barricaded the road and the police
establishing check point near Trilochanpur, with two platoons staying
in a camp in the Trilochanpur school. The goons with complete support
of the armed forces attacked in a strength of about 1500, heavily
armed, with bombs, guns, bows and arrows and other weapons. After
throwing a bomb at the protestors gathering and burning their tent,
the goons mercilessly beat the anti POSCO protestors, especially
targeting the aged and women.
The BJD goons were ruthless; Mrs. Ghura Das of Dhinkia a lady of
about 65 had her broken by beating her with an iron rod; Mrs. Tulsi
Das about 60 years old also had her hand broken by a severe beating;
Mrs. Kunilata Swain, 32 years old was grievously injured on her
forehead; Mr. Dwijo Dash, about 60 years old and Mr. Parikshit Maiti
also about 60 were ruthless beaten and hands fractured. There is a
huge list of others injured and beaten black and blue by the lumpen
brigade of the BJD and POPSCO and none of the injured have been
provided any medical assistance by the state till now, on the other
hand the injured have to secretly smuggle themselves out of Dinkia
and get medical assistance at Paradeep or Cuttack. Through this
entire sordid episode the police were shameless partisans and they
watched while old women and men were being beaten ruthlessly.
In a classic revelation of the true nature of the criminal justice
system of India, those who were beaten have had further additions to
their already absurdly long list of criminal cases filed against
them. Several of the anti POSCO leaders and sympathizers have more
than 200 criminal cases lodged against them, they cannot leave the
area on fear of immediate arrests under ranging from attempt to
murder, rape, criminal trespass, dacoity, arson etc. Not one goon has
had a single case registered against them. This exposes the farce
called the Indian Justice System and the truth behind the much touted
"Largest Democracy in the World". This is the truth behind empty
slogans such as "India Shining" "Land of Ahimsa" "Land of Mahavira
and Buddha" "Father of the nation and non violent Gandhi" all this
lies completely exposed while the class nature of the Indian state
and its comprador rulers leave no stone unturned in serving their
imperialist masters. But why to blame a boot licking dog such as
Naveen Patnaik, when his true master, our revered soft spoken P.M.,
Manmohan Singh can shamelessly declare in Oxford that "India has
greatly benefited from Colonial rule…" and in Washington he opens his
address to Congress with the words, "I have come to sell India.."
Situation in Dhinkia Gram Panchayat:
Despite the reverses suffered, the morale of the villagers is very
high and they are willing to face the police at any moment. The
people expect that the first occasion for a decisive fight may come
in the shape of entry of survey team along with Goons and Police.
Their steely resolve was echoed in words from all age groups, "POSCO
can be built only over our dead bodies". They are keeping night vigil
on the boundary of the village and are preparing themselves to face
the ensuing Nandigram style combined assault by the Armed Goons and
Police. About 13 platoons of the police have been deployed all
around Dhinkia with the notion of "maintaining peace and order", in
reality they have laid siege to Dhinkia panchayat and its villages.
Despite this ordeal and isolation, the people of Dhinkia putting
behind all personal hardships are ready for a decisive fight. Grocery
shops are not functioning properly for the lack of materials, as
merchants supplying goods are facing hardships from the Goons and the
police. Many injured are suffering without treatment.
Despite such fascist repressive measures the PPSS have been
organizing meetings in Gobindpur and Nawagaon. In the last month some
positive developments have taken place; the refusal of the Orissa
government to compensate any affected families farming on so called
government land has forced the pro POSCO agitators to take a harsh
look at their anti people stance and to come to terms with the fact
that their real interest lie with the PPSS and not with corrupt
middle men and contractors such as Damodar Raut.
After the ruthless occupation of Iraq and the down trend and slowdown
in the world economy the intensification of loot by developed nations
is bound to get even sharper. The only realistic and practical
solution to this onslaught can be through mass resistance movements
such as Kalinganagar and the anti-POSCO resistance. The point to be
noted is that these movements are inspiring in showing the resolve of
the militant peasantry, hence they are the important sites of
resistance against imperialism and the comprador elite in the third
world. Therefore it is imperative for the democratic and progressive
forces to firmly rally behind these struggles and provide them their
unflinching support.
MEMORANDUM OF UNDERSTANDING BETWEEN THE GOVERNMENT OF ORISSA AND M/s
POSCO FOR ESTABLISHMENT OF AN INTEGRATED STEEL PLANT AT PARADEEP.
(http://orissagov.nic.in/posco/POSCO-MoU.htm)
This Memorandum of Understanding is made on the Wednesday day of June
22, 2005, between the Governor of Orissa on the one part and M/s
POSCO on the other part.
1. M/s POSCO having its registered office at 1 Koidong-Dong,
Nam-Ku, Pohang-City, Kyungsanbuk Province, Republic of Korea,
(hereinafter referred to as POSCO, which expression shall, unless
repugnant to the context or meaning thereof, include its successors,
executors, administrators, representatives and permitted assignees),
is proposing to set up an Integrated Steel Plant of a total capacity
of 12 million tonnes per annum in the State of Orissa at Paradeep, in
Jagatsinghpur district.
2. The Government of Orissa, desirous of utilizing its natural
resources and rapidly industrializing the State, so as to bring
prosperity and wellbeing to its people, has been making determined
efforts to establish new industries in different locations. In this
context, the Government of Orissa have been seeking to identify
suitable promoters to establish new Integrated Steel Plants in view
of the rich iron ore and coal deposits in the State.
3. POSCO will establish an Indian company (hereinafter
referred to as the "Company") through their relevant subsidiaries,
related companies or third parties nominated by POSCO to invest in
the State of Orissa in :
(A) steel manufacturing;
(B) infrastructure necessary for the Integrated Steel Plant and
related Projects; and
(C) related mining of iron ore and other ores.
4. (1)The Company is desirous of developing and operating the
following facilities on the basis described in this MoU in the State
of Orissa with proposed investment of around US$ 12 billion or Rs.
51,000 crores (approximately). The details of the facilities are
given in the table below :
Project
Phase
No.
Capacity in MTPA
Project Details
Project cost in Rs. Crore (Approx.)
Time Schedule
Finished products
Steel Plant with FINEX / BF, along with other facilities like Lime
Calcining Plant, Oxygen Plant, Captive Power Plant, Steel Melt Shop
with Converters, Casters, Rolling Mills etc. (collectively, the
"Steel Project") & Minor Port
Phase-1
6 (in two modules of 3 MT each)
1st Module
Crude Steel
- 3 MTPA
Finished Steel -2.82MTPA
10,100
To be commissioned by July 2010 or 36 months from the date of (i)
taking title to and possession of land. (ii)
registration of the executed prospecting licence,
whichever is later
Slabs
(3MT)
2nd Module
Crude steel – 3MTPA
Finished Steel -2.82MTPA
11,800
To be commissioned by July 2012 or 24 months from Commissioning of
Phase - I, Module – I,
whichever is later
Hot rolled Coil (4.5MT),
Plate
(1.5MT)
etc.*
Phase-2
6 (in two modules of 3 MT each)
1st Module
Crude Steel
-3MTPA
Finished Steel -2.82MTPA
9,500
To be commissioned by July 2014 or 24 months from commissioning of
Phase - I, Module – 2,
whichever is later
Slabs
(3MT)
2nd Module
Crude steel – 3MTPA
Finished Steel -2.82MTPA
12,000
To be commissioned by July 2016 or 24 months from commissioning of
Phase - 2,
Module - 1.
Hot Rolled Coil (4.5MT),
Plate, Cold rolled coil
(1.5MT) etc.**
Note: Detailed time schedule for the commissioning of each phase
will be determined pursuant to Clause 18.
* Cumulative of Phase-1;
** Cumulative of Phase-2.
(2) The Company is also desirous of developing and operating the
following related infrastructure based on the needs of the "Steel
Project", on the basis described in this MoU :
i. mining facilities in the areas allocated by
Government of Orissa/Government of India (the "Mining Project");
ii. road, rail and port infrastructure (the
"Transportation Project"), including the dedicated railway line from
the mine-belt to Paradeep;
iii. integrated township; and
iv. water supply infrastructure (the "Water Project").
(3) The Steel Project will be located at Paradeep. The Mining
Project will be established at the mining site(s) that are identified
as the mineral resources for the Company.
(4) To achieve the foregoing purposes, the Government of Orissa
and the Company agree to be "Partners in Development" and have,
therefore, come together to record their intentions through this MoU.
5. LAND :
(i) The Company will establish their registered office and national
headquarters in the State of Orissa, in the city of Bhubaneswar. The
Government of Orissa will identify, acquire and transfer a suitable
tract of land between 20 and 25 acres for this purpose, in accordance
with the specifications provided by the Company.
(ii) The Company will require approximately 4,000 acres of land
(hereinafter referred to as the "Land") for the purpose of setting up
the Steel Project and associated facilities, including the port
facilities and a storage yard for coking coal.
(iii) In addition, the Company will require approximately 2,000
acres of land for township development, recreational activities and
all related social infrastructure development (collectively, the
"Integrated Township Development"). Out of this, approximately 1,500
acres would be identified adjacent/near to the Steel project and
another 500 acres (approx.) near the Mining Project.
State Government will facilitate all clearances and approvals of
the Central Government, if required.
(iv) In addition to the land required for the core activities of the
Overall Project, the Company may require additional land pockets for
development of the "transportation project", the "water project" and
any other project-related infrastructure facilities.
(v) The Government of Orissa agrees to acquire and transfer all the
above-mentioned land required for the Overall Project, free from all
encumbrances through Orissa Industrial Infrastructure Development
Corporation (IDCO) on payment of the cost of land.
(vi) The Company shall pay to the relevant authority (ies) the cost
of such land. For private land, the Company shall pay the cost as
determined under the provisions of the Land Acquisition Act and
incidental charges as mutually agreed upon. For Government land, the
Company shall pay as per the rates determined by the prevailing
Industrial Policy Resolution on this date. For forest land, the
Company shall pay the rates determined under the applicable Rules.
(vii) On its part, the Government of Orissa will expeditiously and
within a reasonable time frame, hand over to the Company non-forest
Government land for which the Company has completed all formalities.
Acquisition of private land will be taken up on priority.
(viii) For rehabilitation of displaced families, Rehabilitation and
Resettlement Package would be implemented as per prevailing
guidelines and practices.
6. RAW MATERIALS :
(i) Coal : The State Government agrees to recommend to the
Government of India for allotment of suitable coal blocks for captive
coal mining for the project either directly or through a PSU.
Further, the State Government will assist the Company to get the
allocation of coal linkage of suitable grade in the desired quantity
to meet its requirement until it is ready for mining of its coal block.
(ii) Iron Ore : The Company will need the equivalent of 600
million tonnes of iron ore of an average Fe content of 62%, to meet
the requirements of the proposed Steel Project of 12 million tonnes
per annum. The Company may swap certain quantities (not exceeding
30% of the total requirement for the Paradeep Plant annually) of such
iron ore which have high alumina content with equal quantity of low
alumina content iron ore of equivalent or better Fe content imported
for blending, in order to produce better quality steel in the
Paradeep Project and conserve energy . Any export of iron ore by way
of swap will be allowed only after an equivalent quantity of ore has
been imported for the plant. The extent of the above quantity of iron
ore by way of replacement for equal quantity of import of higher
grade iron ore, will be within the framework of the Export-Import
Policy of the Government of India applicable from time to
time. It is clarified that no export of iron ore will be
allowed from the captive mine except by way of full replacement
through import of equal quantity of high grade ore and within the
limits mentioned above.
(iii) The Government of Orissa agrees to grant prospecting
licenses and captive mining leases for 600 million tonnes of iron ore
to the Company after following prescribed procedures and completion
of required milestones including approvals of Government of India.
For this purpose, the Government of Orissa shall recommend to the
Central Government and use its best efforts to obtain the Central
Government's approval within the minimum possible time for the grant
of prospecting licenses and the captive mining leases for the iron
ore mines.
(iv) The Government of Orissa will recommend grant of the
Prospecting Licences only after the following milestones have been
achieved :
a) Formation of the Indian Company referred to in Clause - 3 has
been done;
b) Feasibility study has been started and a Detailed Project Report
has been commissioned ( July - November, 05);
c) Additional Soil test and site survey has been started ;
d) Preparation of Port Development Plan has been commissioned (July,
05 – January,06);
e) Preparation of Industrial Water Development Plan has been
commissioned (July, 05 – January,06);
f) Preparation of Township Master Plan has been commissioned
(August,05 – March 06);
g) Preparation of Environment Impact Assessment Study has been
commissioned (July,05 – January,06);
h) Requisition has been submitted to the Orissa Industrial
Infrastructure Development Corporation (IDCO) for acquisition of land
for the steel plant as well as the port;
i) The Indian Company is provided with paid up equity to the tune
of at least US$ 50 million to enable it to undertake all the
preparatory work required for setting up the plant.
(v) The Government of Orissa will recommend such areas as are free
from litigation as well as encumbrances. In the event of litigation
at any stage, Government of Orissa will diligently defend their
recommendations made in favour of the Company in the appropriate
judicial, quasi judicial fora.
(vi) Prior to recommending the case of the Company for Mining
Lease, the State Government will ensure that the following milestones
have been achieved :
a) The Company has submitted the Detailed Project Report;
b) The Company has submitted the Port Development Plan ;
c) The Company has submitted the Industrial Water Development Plan ;
d) The Company has submitted the Township Master Plan ;
e) The Company has ensured that application for Environment Impact
Assessment Study has been submitted to the Government of India ;
f) The Company has filed necessary requisition for land for
different components of the project with IDCO and has deposited
necessary funds;
g) The Company has submitted the rehabilitation and re-settlement
package for the oustees to the competent authority and received the
approval of Government of Orissa;
h) The Company has submitted the proposal with requisite details for
diversion of forest land which the Government of Orissa will
recommend to the Government of India;
i) The Company has applied for Coastal Regulation Zone (CRZ)
clearance.
(vi) The Indian Company is provided with paid up equity to
the tune of at least US$ 200 million to enable it to undertake
adequate investment connected with the setting up of the plant.
(vii) Recommendation for the mining lease will be made in two
phases, commensurate with the first two modules and the last two
modules of 3 million tonnes each. The recommendation will, however,
be subject to suitable adjustment of mining blocks. State
Government will take a decision pertaining to the first phase after
the following milestones have been achieved for the first phase of 6
million tonnes :
a) Award of 50% of orders for civil and structural contracts in
terms of value.
b) Placement of 20% of firm orders for machinery in terms of value.
(viii) State Government will make recommendation pertaining to the
second phase after :
a) Commissioning of the first module of 3 million tonnes of the
first phase has been achieved ;
b) Award of 50% of orders for civil and structural contracts in
terms of value for the second phase of 6 million tonnes ;
c) Placement of 20% of firm orders for machinery in terms of value
for the second phase of 6 million tonnes.
(ix) The State Government agrees to assist the Company in making a
firm arrangement with the Orissa Mining Corporation (OMC) along with
other private iron ore lessees in the State, to meet a substantial
portion of the requirement of iron ore of suitable grade for initial
period of steel making under mutually agreeable terms and conditions,
if required by the Company.
(x) All iron ore Mining Leases and Prospecting Licenses shall be
clean and free of any encumbrances.
(xi) Before the grant of mining lease, the Company would submit a
detailed progress report of all components of the project with
reference to the agreed implementation schedule (referred to Clause
18 (ii) hereinafter). The mining lease would be granted subject to
the satisfaction of the Government of Orissa that adequate progress
has been achieved in all critical parameters.
(xii) The iron ore mining leases shall be granted to the Company
initially for a period of 30 years and will be considered for renewal
on an application by the Company before expiry, for another 20 years.
(xiii) The Government of Orissa will assist the Company in
obtaining all clearances, including forest and environment clearance
and approval of the State Pollution Control Board, and the Ministry
of Environment and Forest, Government of India under Forest
(Conservation) Act, 1980 and Environmental (Protection) Act, 1986 for
opening up the iron ore mines, laying roads, constructing township etc.
(xiv) The Government of Orissa agrees to provide all possible
assistance to the Company for acquiring mineral concession for
limestone and dolomite within the ambit of the MMDR Act and MC Rules.
(xv) Govt. of Orissa will make best efforts and provide all
possible assistance to POSCO for expeditious clearance of
applications relating to mining lease and related matters such as
forest, environment etc. so as to enable POSCO to start its mining
operations in time to synchronize with the commissioning of its steel
plant.
POSCO have requested to source an additional 400 MT of Iron ore from
India for their existing steel plants in South Korea. This can be
done through a long–term commercial supply arrangement from the open
market. Any such trading arrangement shall fall entirely within the
domain of the Government of India and will be regulated by the
prevailing Export – Import Policy of the Country. No mine-able
reserves can be provided by Government of Orissa purely for the
purpose of direct exports beyond what has been indicated for value
addition in the steel plant of the Company in Orissa in the preceding
paragraphs. However, Government of Orissa will assist POSCO in
establishing suitable contacts and interfaces with Government of
India for this purpose.
(xvi) Chrome Ore : State Government will facilitate suitable
long term arrangement with OMC and other lessees for supply of chrome
ore to meet the requirement of the plant.
(xvii) Manganese Ore : The State Government would consider assigning
appropriate priority to an application of the Company for mineral
concession for manganese ore in the State as and when available
within the ambit of MMDR Act and MC Rules.
7. WATER :
(i) The Government of Orissa will permit drawal and use of
water from the Mahanadi barrage at Jobra in Cuttack or any other
suitable source for construction and operation of the Overall Project
as per the prevailing rates and appropriate terms and approval of the
Water Allocation Committee, subject to availability.
(ii) The Company shall prepare and inform the Government of Orissa
within a short period of time, the water requirement for each phase
and the total water requirement for each component. The Government
of Orissa will facilitate meeting these water requirements.
(iii) The Government of Orissa will permit implementation of a
suitable water supply scheme prepared jointly by the Company and the
Department of Water Resources, Government of Orissa. The Government
of Orissa will allow the Company to operate and maintain necessary
infrastructure including creation of water bodies, laying of
pipelines etc. to pump required quantity of water for the development
and operation of the Project.
(iv) The Government of Orissa will facilitate the process of
obtaining various approvals expeditiously for the Company.
8. DRAINAGE AND SEWERAGE :
(i) The Government of Orissa shall assist the Company to provide
adequate drainage and sewerage off-take facilities for each component
project during both the construction and operation stages prior to
commencement of construction after following all prescribed
procedures and obtaining required approvals.
(ii) The Government of Orissa shall facilitate grant of all
necessary approvals for provision of such facilities and the
discharge of drainage and sewerage into such facilities.
9. POWER :
(i) The Government of Orissa have agreed to ensure that about 25 MW
of power is made available to the Company to meet the construction
power requirements of the steel plant, port, township and also the
mining project. During the operation phase, the Government of Orissa
will make best efforts to meet the power requirement of all
components of the project including each of its components.
The details of the requirement of power during the
construction phase of the Overall Project including each of its
components and year-wise requirement thereafter for the operation of
the project, will be prepared by the Company and the Government of
Orissa or agency designated by it and will be duly informed in good
time.
(ii) The Government of Orissa will facilitate the execution of an
agreement for the Transmission line from the sub-stations to their
project sites, under the supervision of GRIDCO.
10. CAPTIVE POWER PLANT :
(i) The Company will establish a Captive Power Plant (CPP) to meet
the power requirement in full or part of the overall project
including its components.
(ii) The Government of Orissa will facilitate grant of approvals, if
any, required for setting up of this CPP and also execution of
necessary Power Purchase Agreement or Agreement for wheeling of
electricity or both, with GRID Corporation of Orissa or any other
agency designated by the Government of Orissa.
(iii) The Government of Orissa will facilitate the establishment of
fuel linkages, if any, for the CPP.
(iv) The Company will offer to sell any surplus power to GRIDCO or
to any other corporation so designated by the Government at a tariff
to be mutually agreed between the Company and GRIDCO/ any other
corporation so designated by the Government and approved by OERC.
11. ENVIRONMENT:
(i) The Government of Orissa agrees to facilitate and use its best
efforts to enable the Company to obtain a "No Objection
Certificate" (NOC) through the State Pollution Control Board in the
minimum possible time for the development and operation of the Project.
(ii) The Company will conduct a rapid Environment Impact Assessment
("EIA") and prepare a detailed EIA Report and an Environment
Management Plan ("EMP") for the Project. The Government of Orissa
agrees to provide any assistance requested by the Company during the
time the EIA is conducted and the EMP is prepared.
(iii) The Government of Orissa agrees to use its best efforts to
procure the grant of all environmental approvals and forest
clearances from the Central Government within the minimum possible
time for the Project.
12. INCENTIVES AND CONCESSIONS :
(i) The State Government would consider granting to the Company
such incentives and concessions as are provided in the relevant
Industrial Policy Resolution (IPR) in force on this date.
(ii) The Government of Orissa shall recommend to the Central Govt.
and facilitate granting of "Special Economic Zone" (SEZ) status as
required by the Company. This would include granting to the various
aspects of the Project, the status of "SEZ Developer" or "SEZ Unit",
as the case may be, so as to receive the same incentives and benefits
as an SEZ (as permissible under the policy of Central Government).
(iii) If the Company makes an application for setting up its
different facilities under the SEZ scheme of the Government of India,
the Government of Orissa would recommend their case to the
Government of India and accord necessary facilitation with regard to
the approved scheme of the Government of India as modified from time
to time.
13. RAILWAYS, ROADWAYS & PORT:
(1) Railways :
(i) The Government of Orissa shall coordinate with the Ministry of
Railways to ensure expeditious completion of Daitari – Banspani broad
gauge rail link.
(ii) Haridaspur – Paradeep broad gauge rail link is proposed to be
developed through public private partnership by the Rail Vikas Nigam
Ltd., an instrumentality of the Ministry of Railways. The Government
of Orissa will actively pursue with the Ministry of Railways and Rail
Vikas Nigam Ltd. for expeditious completion of this project. The
Company shall explore the possibility of participating in the SPV for
this project. The Government of Orissa shall facilitate all
assistance in this connection.
(iii) Banspani – Paradeep broad gauge rail link based on the
transportation capacities available and project economics, the
Company may develop a dedicated railway line from the site of the
Mining Project to the Steel Project. This development may be
undertaken by the Company or jointly with RVNL or third parties in
consultation with the Ministry of Railways. All assistance in this
regard will be provided by the Government of Orissa.
(iv) In this connection, the Government of Orissa shall extend all
possible support for securing the cooperation of the Ministry of
Railways, East Coast Railways & Rail Vikas Nigam Ltd. etc. to
facilitate necessary clearance from the Ministry of Railways.
(v) The Government of Orissa shall facilitate the Steel Project and
Mining Project to make appropriate commercial arrangements for use of
the railroads mentioned above as per existing laws and procedures.
(2) Roads :
(i) The Government of Orissa shall provide all support to
facilitate the early completion of the National Highway between
Haridaspur (Chandikhol) and Paradeep and for upgradation of the State
Highway from Cuttack to Paradeep to a two lane road.
(ii) The Government of Orissa shall actively consider construction
of two lane, free access, public roads connecting the Steel Project,
the Mine Project and the Integrated Township Development to the
nearest National Highway or State Highway.
(3) Port :
(i) The Company may :
a) develop a new minor port adjacent to the existing Major Port of
Paradeep and/or,
b) develop a dedicated berth at the Major Port of Paradeep and/or
c) make use of the existing port facilities at the Major Port of
Paradeep.
(ii) In connection with subparagraphs (b) & (c) of (i) above,
Government of Orissa shall facilitate cooperation between the
Paradeep Port Trust and the Company.
(iii) In case the Company decides to develop a new minor port, the
Government of Orissa will consider granting the Company necessary
permission under its existing policy for development and operation of
such a port as per standard concessions prescribed.
(iv) The Government of Orissa agrees to provide all necessary
infrastructure and logistic support required for setting up of the
minor port by the Company.
(v) Such minor port or berth will be constructed and operated on the
basis of BOO/BOOT/BOOST.
(vi) The Government of Orissa shall facilitate drawal of power and
water for the port project.
(vii) For this purpose, the Government of Orissa subject to
fulfillment of prescribed procedures and requirements shall grant
necessary approvals within its power and facilitate grant of all
approvals from the Central Government and other relevant agencies
including clearance by the Central Government, the Ministry of
Environment and Forest under the Coastal Regulation Zone Notification
[S.O.114(E)] of 1991 pursuant to the Environment (Protection) Act, 1986.
14. PROJECT FACILITATION :
(i) A dedicated High Powered Committee shall be constituted
jointly by the Government of Orissa and the Company to ensure that
the Project proceeds as per the planned schedule. The High Powered
Committee shall include as permanent members, senior officers of the
departments of Steel & Mines, Industries, Energy, Water Resources,
Works, Commerce and Transport, Forest and Environment and
representatives from the Company. The Government of Orissa shall
arrange for representatives of other departments to be present for
each meeting as required.
(ii) The High Powered Committee shall meet from time to time to
review the progress of the Project.
(iii) The High Powered Committee will also have regular
interactions with the Chief Minister and the Chief Secretary of the
Government of Orissa to apprise them of the progress made on the
Overall Project and each component project.
15. SINGLE WINDOW :
The Government of Orissa shall establish a special "Single Window
Clearance Committee" to ensure clearances under State laws from
agencies / departments within specified time limits.
16. NODAL OFFICER :
(1) The Government of Orissa shall appoint a senior officer to be the
Nodal Officer for the Project.
(2) All applications made by the Company for all relevant clearances,
permits, approvals, licenses, consents and the like or facilitation
for the Project shall be routed through the Nodal Officer. The Nodal
Officer shall diligently pursue the granting of all such approvals/
clearances within the minimum possible time and update the Company at
regular intervals on the status of these applications.
(3) An Officer reporting to the Nodal Officer would be designated by
the Government of Orissa to assist in obtaining necessary approvals
from the Central Government as well as its agencies as quickly as
possible.
17. SECURITY :
The Government of Orissa will take action to provide overall
security as per applicable law, as may be required to all parts of
the Project during the operation phase. All necessary steps in this
regard including setting up of police stations, if required, would be
taken by Government of Orissa.
18. NEXT STEPS
(i) Immediately following the execution of this MoU, the
Government of Orissa shall second (at its own cost) to the
Company's Project office in Bhubaneswar, an Officer of the
appropriate level to be dedicated to the facilitation of the Project.
(ii) Within 6 months from the formulation of the Company, (i) a
detailed project schedule will be prepared by the Company and
submitted to the Government of Orissa, (ii) a detailed implementation
plan will be prepared by the Company and submitted to the Government
of Orissa and (iii) Agreement will be signed between the Government
of Orissa and the Company along the lines of this MoU.
19. GENERAL CLAUSES
(i) The Government of Orissa appreciates that the Company will be
a responsible corporate house with a high involvement in employees'
welfare and social development. The Government of Orissa, therefore,
anticipates that the Company will bring this philosophy to the steel
plant project being set up in the district of Jagatsingpur and other
district(s) where captive mines linked to the project are located to
ensure the well being of these districts in particular and the people
of Orissa in general. In terms of employment, preference will be
given to the people of Orissa subject to need and their possessing
the necessary qualifications. The Company will make every effort to
improve their skill levels, if necessary, through specialized
training. For this purpose State Government will nominate a nodal
Agency/Officer to coordinate with the Company.
(ii) The Government of Orissa appreciates that the Company will
be entitled to induct suitable foreign and/or Indian Joint Venture
partners, choose appropriate financial options, suppliers, credit
options and technologies in the best interests of the project.
(iii) The Company shall effect sale of all its products in the
domestic tariff area (including inter-state sales) in the State of
Orissa and shall not effect any branch transfer of its products to
out side the State. These stipulations are not, however, applicable
to export of finished products outside the country.
(iv) The Company shall comply with all applicable laws and
policies of the Republic of India and the State of Orissa including
more specifically those relating to environment, mining,
rehabilitation and socio-economic development in the periphery of the
project and also including the Orissa Government Notification No.375
dated 15th January, 2004.
(v) The MoU shall remain valid for a period of five years from
the date of signing. Further extension, if necessary, shall be made
as per mutual agreement. However, no such extension shall be
considered unless the Company has made substantial progress on
implementation of the project in terms of construction, erection of
plant and machinery and investment at site to the satisfaction of the
State Government in these five years in implementing the first phase
as envisaged in this MoU.
(vi) The Company understands that the offers and special
considerations of the State Government indicated in this MoU are for
the overall Steel project
(vii) The Company while implementing the project undertakes to
comply with all statutory requirements/clearances in respect of laws,
regulations and procedures governing establishment and operation of
Industries.
(viii) In the event of non-implementation of the project or part
thereof, the corresponding support/commitment of the State Government
indicated in the MoU with regard to Iron ore Mines/Coal Block,
incentives and concessions of the State Government in particular
shall be deemed to be withdrawn.
Signed on the date mentioned herein above at Orissa Secretariat,
Bhubaneswar by the authorized representatives of the parties to this
Memorandum of Understanding.
For and on behalf of the
Government of Orissa
(Mr. Bhaskar Chatterjee)
Principal Secretary to Government
Department of Steel & Mines
For and on behalf of POSCO
(Mr. Soung Sik Cho)
Senior Executive Vice President
[1] A team of independent observers comprising Sumit Chakravartty,
Editor, Manistream weekly, New Delhi; Sridevi Panikkar, Delhi
Solidarity Group; Bijulal M. V., Indian Social Institute, New Delhi;
Manshi Asher, National Centre for Advocacy Studies, Pune, visited
Bhubaneswar and Jagatsinghpur between April 19 and 22, 2007
[2] http://orissagov.nic.in/posco/POSCO-MoU.htm
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