Posco project back on course

From the days when speculation was rife that Posco could abandon its plan for a 12 million tonne steel plant in Orissa on account of local opposition and government dilly-dallying, the project is now back on course.

For the first time, the steel behemoth sounds confident about its plans and meeting deadlines on such critical aspects such as land acquisition and prospecting licence for iron ore mining.

"The ground preparation for the steel project begins next month. Land acquisition and grant of a prospecting licence for mines will be over by the end of the year. And early next year we will start port construction for the steel plant," says Posco India Chairman & Managing Director Soungsik Cho.

"By early 2009, we will start the construction of the plant. Steel will roll out from the plant in 2011, just a year behind schedule."

Clearly, the clouds of uncertainty that loomed large over the Rs 50,000 crore project have drifted away.

The world's third-largest steel company grappled with land acquisition ever since it signed the memorandum of understanding with the Orissa government mid-2005. Now Posco has acquired 1,093 acres and will soon acquire about 300 acres more.

Land and rehab

The Posco project is planned over 4,004 acres (3,566 acres of it government land, which includes 3,093 acres of forests). The forest advisory committee cleared the forest diversion proposal of the company last month. This involves compulsory afforestation on a equal area nearby. The scheme awaits the nod of the Supreme Court.

The company is also progressing on rehabilitation and resettlement (R&R) for the 450 families who will be displaced on account of the project. Of these 450 families across eight villages, 140 families live in Dhinkia, the nerve centre of local opposition.

"In this village, 50 families have already moved to a nearby school and they will be shifted to resettlement camps soon," Cho says. "We have to develop the resettlement area first and then people will be moved according to the R&R policy of the Orissa government."

The company also plans to delay construction in Dhinkia till the atmosphere turns favourable.

Mine lease

The pursuit of mines, which has proved to be the most daunting task for the steel maker, seems to be over now.

The hearing on 251 applications for grant of mining lease, which includes the Khandhar mines that Posco wants to develop, is expected to be completed by early November and submitted to the Centre for its approval.

"Two other applications of the company for mining lease are pending litigation," company executives say.

Cho says the company is supposed to get the final prospecting licence for the Khandhar mines by the year end. The company has made a demand for 600 million tonnes of iron ore over 20 years and the Khandhar mines will provide a third of that requirement. "Around 2010, we can start developing the mine area," Cho says.

Port plus

The steelmaker also sounds confident on its Rs 1,600 crore port project starting early next year, after it completes land acquisition for the plant.

The company will start its land preparation work at the site next month. "We are going at a good pace and presently focussing on land preparation that will be started by October," says Cho.

The company is also constructing three approach roads which will provide connectivity to the plant. It is also laying railway lines along with Rail Vikas Nigam. This includes the 98-km Haridaspur-Paradip line, land for which has already been acquired.