NEW DELHI: As Biju Janata Dal gears up for elections in 2014, Odisha's chief minister Naveen Patnaik is pushing for work to begin on the big-ticket Posco steel project — once touted as the biggest foreign direct investment in India and now usually cited as an example of the difficulties foreign investors face in India.
The state's enthusiasm, though, has the company in a fix since it has only two-thirds of the land it needs and no certainty on environmental clearance, without which work can't begin.
"Posco will be holding a ground-breaking ceremony shortly," Patnaik told ET a day after meeting company officials last week. Protests have delayed the project for eight years now.
In the recent past the state has shown uncharacteristic determination to get the Posco project off the ground. At the recent meeting, the CM's office reportedly indicated its keenness on Posco beginning work in June, even if it is within the parcel of 1,700 acres of land.
But Posco requires 2,700 acres. The Orissa Industrial Infrastructure Development Corporation, the facilitating agency, is believed to have acquired another 400 acres, but that still leaves Posco short of 600 acres.
To top Posco's problems, on May 28, the National Green Tribunal ordered a status quo on land acquisition, until the MoEF renewed a lapsed clearance. An expert appraisal committee reviewed Posco's application last month and company officials are expecting a recommendation for a new environment clearance.
A final call though rests with the minister, Jayanthi Natrajan. The long delay is partly on account of the fact that the administration has proceeded cautiously to avoid another 'Kalinganagar-like incident' in the state — a reference to the January 2006 police firing in which 13 tribals protesting against land acquisition for a Tata SteelBSE -0.89 % plant were killed.
Delays have also been attributed to the lack of support from Patnaik's former strategist Pyarimohan Mahapatra as well as litigation over the allotted mine that ended recently. Posco's plant and Vedanta's alumina refinery were to epitomize BJD's efforts to use the state's abundant minerals to industrialise agrarian and not so-wealthy Odisha.
After years of controversies Vedanta's refinery remains shut for want of bauxite and Posco is yet to start construction. Patnaik blames the MoEF. "The Centre needs to have a clearer view on environmental issues. We are very aware of environment issues and guard against any adverse impact," he said.
A Planning Commission member says the state could have done more. Professor Abhijit Sen, member, Planning Commission,says: "If the state really believes in the larger gains from an opportunity, and environmental considerations have been made, then it has to do everything to make it happen. Rather than wait for a Supreme Court writ, and leave it like a cancer to fester away. It gives the project a bad name; it gives the state a bad name."