Archive for the 'R & R' Category

POSCO reiterates its commitment to Orissa project

INDUSTRY and INFRASTRUCTURE, INVESTMENTS and INVESTMENT PLANS, Iron Ore, Jagatsinghpur, Paradip - Jatadhari - Kujanga, Ports and waterways, POSCO, R & R, Railways, Steel Comments Off on POSCO reiterates its commitment to Orissa project

Kalingatimes reports that Posco is definitely interested in the Orissa project.
Excerpts of the Article below

… The latest statement from the authorities of POSCO-India makes it clear that they were here to stay – to pursue their 12 million tonne per annum capacity steel mill project in Jagatsinghpur district.

…, the company has said in a statement that it was `confident, determined and committed’ to make its Orissa steel project happen. …

But the company has said that as per its human resource plan, overseas staff deployment in POSCO-India project was purely need based.

“Staff deployment is in relation to specific assignments and the employee moves with the changes in assignment. Accordingly, when the construction phase begins, there would be reallocation of staff from overseas in large number,” a statement from the company said.

Although there had been undue delay in the implementation of the project due to non-acquisition of land for the proposed steel plant, the company has announced it was hopeful of starting ground leveling work by December this year.

“The company is further encouraged by the support extended by Government of Orissa as well as Government of India for expediting the project,’ the statement said.

“Going by the recent developments, the company is happy to note that there is a greater understanding and wider consensus in favor of the project building up at all levels, notably among people in the project site.” …

If official sources are to be believed, … POSCO authorities were ready to wait for several more years to implement the project.

“The main worry of POSCO-India authorities would be over the day they were granted prospecting licence for the Khandadhar iron ore mines by the Central government.

As regards the people’s opposition to displacement by the proposed steel plant in Jagatsinghpur as well as the move to grant of prospecting licence to the company for Khandadhar mines, sources said that POSCO was used to such resistance.

“They are hopeful that things will slowly start changing and the opposition will lose strength in due course,” a senior government official observed.

Rehabilitation process begins

Meanwhile, the company, in association with the district administration, has started the process for rehabilitating 48 families that had left Patna village under Dhinkia panchayat of Jagatsinghpur following their differences with those who were against the setting up of the steel plant in their locality.

The company was hopeful that a transit camp for the 48 families would come up within four weeks. Simultaneously, efforts were being made to select a site for constructing a full-fledged rehabilitation colony for these families.

A company official said that once the habilitation colony was set up it would attract people from the camp that was opposed to the project.

The families which had come out of their villages on their own and were supporting the project would be given rehabilitation benefits under the provisions of the existing Resettlement and Rehabilitation Policy of the State.

Going by the company’s stand, it appears clear that they might start thinking in terms of packing their bags only if the both the Central Government and the State Government expressed their unwillingness to extend help. But going by the eagerness on the part of both the governments to help POSCO-India, such a situation was unlikely to emerge in the next few years. After all, POSCO-India’s steel project still continues to carry the tag of biggest ever foreign direct investment in the country.

This sounds like a good reinforcement of it’s commitment to the Orissa project.

Salient points of the recommended new mineral policy

Coal, Iron Ore, MINES and MINERALS, Mining royalty, R & R, Steel, Value Addition Comments Off on Salient points of the recommended new mineral policy

The economic times reports that the new mineral policy has been announced. Excerpts are mentioned in another post. Here, we list it’s salient features.

  • The GoM has accepted the views of the mining industry while recommending no changes in the guidelines for exports.[This decision supports POSCO’s case for captive mines]
  • More powers provided to state government. The state governments will be able to give preference to companies undertaking value addition within the state while allotting iron ore mines. This will reduce standalone mines.
  • The policy will provide captive mines to all steel units in operation up to July 2006.[I’m not sure about it’s implications for POSCO]
  • The policy will now aim towards procedural simplification for attracting investments in the sector.
  • It will also benefit the states as under the new policy, the present system of specific rate royalty will shift to ad valorem rate of 7.5%.[This will have great benefits for Orissa and other mineral rich states]. Once notified, the proposal will increase royalty earnings by almost six times.
  • The states sitting over mining applications of companies will be penalised as delays will transfer their powers to the Centre.
  • Another important aspect of the new policy is that a process of competitive bidding can be initiated for allocation of captive coal blocks. This is presently done by a screening committee within the coal ministry. The bidding process will also be started for all other major minerals.
  • Besides, the government will auction mining areas where full prospecting has to be done.
  • Companies will have to earmark 3% of turnover for undertaking rehabilitation and resettlement of displaced people under a sustainable development model. However, the ministry of environment and forests will work out fresh guidelines separately to introduce environment-friendly mining practices in the industry.

The economic times states that mining areas will be auctioned for prospecting but the Telegraph says that Auctions mean global giants such as Posco and ArcelorMittal will not be allowed to negotiate for leases with Jharkhand and Orissa on the basis of plans for units in these states. Of course, this statement is speculative. But the states need to be careful before agreeing to this proposal.

Perhaps, We will have to wait and watch for the final notification on the policy.

POSCO Status: a Financial express interview

Bhubaneswar-Paradip, Iron Ore, Jagatsinghpur, Paradip - Jatadhari - Kujanga, Ports and waterways, POSCO, R & R Comments Off on POSCO Status: a Financial express interview

Financial express carried a short interview of POSCO India Chairman and MD with journalist Dilip Bisoi. This interview gives a good idea of the status of the POSCO India project. Following are some excerpts:

  • How you are going to accelerate the project’s implementation? We have chalked out a strategy to implement the project. We are preparing to start the ground preparation work by October 2007. Out of the 4,004 acre of land, 3,566 acre is government land and 438 acre is private land. Out of the private land, only 30 acre is fertile land as it yields double crops. We are willing to exclude the 30-acre fertile land from the project site. We are also willing to differ use of the 438 acre private land until the villagers were willing to sell.
  • Anti-Posco activists have set up checkpoints and are not allowing anybody to enter the site. How do you plan to enter the area and start work? It is not true that we don’t have access to the site. We do have some access to the site. Villagers in Gadakujanga grampanchayat are supporting the project, while people in Nuagoan area are starting to change their mind in favour of the project. Only a small area of Dhinkia grampanchayat is not accessible. We will shed that portion from the project site for the time being. Access to the site and starting civil work will not be difficult.
  • Have you prepared your R&R package?  We are preparing a special R&R package for the displaced people. The Xavier Institute of Management, Bhubaneswar, has been engaged in conducting a survey to understand the needs of the people. The package will be announced once it gets the approval of the Rehabilitation & Peripheral Development Authority. I promise, I will make their lives better than before. Rehabilitating 450 displaced families is not a big job. We want to provide them with a sustainable livelihood.
  • How confident you are that the project work will start by October 2007? The next two to three months are very crucial. The prospecting licence for the Khandahar iron ore mines and forest clearance for the project site are expected in the next few months. Once these issues are settled, we will go ahead with the land preparation. If everything goes according to plan, we will procure equipment for the steel plant by the second half of next year. We will shop in the Indian market before going to Asian countries like China and Vietnam. The main plant, however, will be imported from Posco in South Korea. However, starting of the peripheral work at the site by October is very essential.

MCL, Jobs, CSR and R & R: Should follow CCL

Coal, Corporate Social Responsibility (CSR), MCL, R & R 13 Comments »

On the ongoing tussle to make MCK comply with R & R policies MP Dharmendar Pradhan has compared MCL’s hirings with other similar companies hirings. New Indian Express gives a report on this and we give some excerpts from that report.

The average annual production of coal in Eastern Coalfields Limited (ECL) is 30 million tonne with a workforce of 1.02 lakh; with 95,000 manpower, the annual production of Bharat Coking Coal Limited (BCCL) is about 23 million tonne, and Central Coalfields Limited (CCL) has nearly 90,000 workforce to produce 32 million tonne.

Similarly, the Western Coalfields Limited (WCL) has about 70,000 employees with an annual production of 42 million tonne. The South Eastern Coalfields Limited (SECL) is the largest producer of coal with annual production of 88 million tonne and has 80,000 workforce.

On the other hand, MCL, the second largest producer of coking grade coal in the country with average annual production of 80 million tonne, has given jobs to 20,591 people. The company has been facing resistance from the locals for its poor policy on resettlement and rehabilitation.

MCL’s Chairman and Managing Director Aviram Sharma was caught on the wrong foot when Dharmendra Pradhan, MP, sought to know from him the manpower position in other subsidiaries of Coal India vis-a-vis their production at a high level meeting here on Thursday. The meeting was convened to discuss the contentious issue of R&R policy in MCL areas.

Pradhan told the meeting that there are nearly 5,000 rightful claimants for compensatory job in MCL. Besides, MCL is not doing a favour to them as they have already lost their land and livelihood, he argued.

Revenue Minister Manmohan Samal, who presided over the meeting, directed MCL and NTPC to implement the policy and report it every week on the progress.

Now, just because MCL employs less it does not become a bad guy. But, if must follow the R & R policies and also keep its promises. Moreover, it should consider the action by Central Coal Fields to set up an engineering college in Jharkhand. Following is an excerpt from the Business Standard article that reported on this.

The Jharkhand-based public sector Central Coalfields Limited (CCL) has established 68 schools in various parts of its working areas of different standards besides financial and other infrastructural help to 195 schools situated in and around CCL command area.

CCL has recently decided to establish on engineering college for the benefit of the people of Jharkhand.

CCL spent over Rs 1042 crore on social overhead onwards 1998. It had constructed over 160 km of heavy duty coal transportation roads. 300 km of approach road and equal length of colony roads, 6 major bridges on river Damodar, 59,455 permanent houses, 19 hospitals besides water supply schemes covering over a population of 5.02
lakh. CCL is also one of the major employers in Jharkhand.

It has 62,827 employees on the roll of which 35 per cent belonged to Schedules caste and Scheduled tribes.

The company is also one of the major contributors to state exchequer. The state has earned over Rs 2811.56 crore of royalty and other taxes from CCL?s mining activities after the constitution of Jharkhand state. …

In the financial year 2006-07, CCL has constructed/repaired 35 km new roads in nearby villages in its command area. Over and above, CCL is to organise 215 health camps for various specializations during this financial year.

Orissa government gets tough on MCL

Coal, MCL, NALCO, NTPC, R & R Comments Off on Orissa government gets tough on MCL

Statesman reports that the Orissa government has asked MCL to provide jobs to displaced people. Following are some excerpts from that report.

The state government today directed Mahanadi Coalfields Ltd to provide jobs to all those affected or displaced persons within four weeks and also asked other PSUs ~ NTPC and Nalco ~ to furnish weekly progress reports on rehabilitation measures. The decisions were taken at a high level meeting convened by revenue minister Mr Manmohan Samal here today. …

Mr Samal today directed that all categories of land losers and affected persons ought to be provided with employment within four weeks. Interestingly, he is also believed to have told the Central PSU that they should go by the Land Acquisition Act and not the Coal Bearing Act. The implementation of Coal Bearing Act had created problems since much of the land was notified but lying unacquired physically for several years. In the process, the land owner was unable to either sell or do anything with the land. With regards to employment of affected persons, it is learnt that the contentious issue relates to what is categorised as “C” type affected persons. These were people who had lost their land practically and not their homestead land.

Demand to legislate the R&R policy

MCL, R & R Comments Off on Demand to legislate the R&R policy

New Indian express reports that the Orissa krushak sangha demands that Orissa R&R policy is made as an legislation.

I welcome this as a good step. Also, this signifies that the orissa krsuhak sangha is supporting this policy. This is an encouraging sign. Possibly an indication of a partnership between farmers and industries.

Orissa Krushak Mahasangha has urged State Government to make rehabilitation and resettlement (R&R) policy a law. Citing instance of Mahanadi Coalfields which is accused of not implementing R&R measures causing strong resentment among the oustees, chairman of the farmer outfit Bibhudendu Pratap Das said once it is made a legislation, no company would be able to violate it.

Violators would attract penal provision, he added.

He also demanded that special courts should be set up for such cases.

POSCO considering offering shares as part of R & R

Paradip - Jatadhari - Kujanga, POSCO, R & R, Steel Comments Off on POSCO considering offering shares as part of R & R

Business standard reports that POSCO is considering offering shares as part of its R & R. Following are some excerpts from that report.

Meanwhile, Posco is considering share allotment to landholders as an option for its Rs 52,000 crore project in Orissa. The company, which requires nearly 4,000 acres of land for a 12-million-tonne plant, says it will take a call on the issue by the end of this month.

“No doubt this is an option but we will decide after we know what people want,” a Posco spokesperson said. To understand land-holders’ demands, the company has asked Xavier Institute of Management, Bhubaneshwar, to carry out a socio-economic survey.

Of the 4,004 acres of land Posco requires, 3,566 acres is government land and 438 acres under private ownership.

The private land covers three gram panchayats of Gada Kujanga, Muagaon and Dhinkia. Dhinkia’s is the largest tract covering 200 acres. The area has a significant peasant population with communist affiliation.

The spokesperson added that any share issue would have to be over and above the compensation. “Otherwise, people will not like it,” he said.

Both Posco and Videocon will also offer one job per displaced family.

The Orissa rehabilitation and resettlement (R&R) policy has a provision for convertible preference shares to be issued to displaced people. The value of the shares could be up to 50 per cent of the one-time cash assistance.

What is the public sector Mahanadi Coalfields Limited (MCL) up to?

Central public sector, Coal, MCL, Mining royalty, NALCO, NTPC, R & R, SAIL Comments Off on What is the public sector Mahanadi Coalfields Limited (MCL) up to?

Last week transportation of coal from Mahanadi Coalfields Limited came to a grinding halt and NALCO and NTPC Talcher that depend on that coal got into a critical situation. Following are excerpts from a Newkerala news report that mentions why MCL got into that situation.

Sources said the land losers of Zillinda, Kandhal and Solod affected by Ananta and Bhubaneswari mines stopped Ananata, Jagananath and Bhubaneswari open cast mines and close down the concerned project officers’ offices since yesterday demanding the promised job to the oustees by Mahanadi Coalfield Limited (MCL).

The villagers alleged that MCL authorities did not meet their commitments to provide 80 jobs to them till date forcing them to go for strike.

Similarly the land oustees of Kandhal marched to Lingaraj mine linked to NTPC-kaniha yesterday and stopped the output protesting the non-availability of employment to them as promised by Lingaraj authorities.

Coal transportation from Hngula and Balaram mines had been hit for the last four days due to the road blockade by Soloda villagers demanding jobs.

Angul Collector Girish S N said the authorities were monitoring the situation and senior officials dealing with land acquisition and rehabilitation had been rushed to troubled areas to negotiate with the agitating villagers.

Kalinga Times reported on a letter that CM Naveen Patnaik wrote to the PM on this issue. Following are some excerpts:

In a letter to Singh on Monday, the Chief Minister said that MCL should continue supplying coal to National Aluminium Company (NALCO) and National Thermal Power Corporation (NTPC) to help these industries continue uninterrupted power generation.

Blaming the MCL authorities for not extending the rehabilitation and resettlement benefits to the people affected by coal mining, Patnaik said the public sector undertaking should go as per the State’s R&R policy as the Centre was yet to adopt a new policy in this regard.

Extending R&R benefits to the families affected by the operations of MCL will go a long way in improving law and order situation in the region, Patnaik said.

In recent months there have been reports regarding how some R & R issues with respect to Hirakud dam oustees and SAIL Rourkela still remains unresolved after several decades. It seems that many public sector companies with their central government connections are arrogant and have not done R & R properly. As a result people do not trust R & R promises made by anyone (private or public companies) and as a result various projects that could help Orissa get out of the bottom, are getting inordinately delayed.

R & R by Tata Steel in Kalinganagar

R & R, Steel, Tatas Comments Off on R & R by Tata Steel in Kalinganagar

The following information regarding R & R offered by TATA steel at Kalinganagar is from a Tata Steel brochure that they give me. If there is any inaccuracy in it or if similar packages are not being offered by Tata Steel to others in Kalinganagar please let me know.

[Context: After I had written an open letter regarding how Tata Steel is exploiting Orissa and yet referring to it as marriage between Tata Steel and Orissa, they got in touch with me in December 2006 when I was visiting Bhubaneswar. Although I am still unhappy with Tatas overall (as they have not done much on the issues I mentioned in the open letter), I personally think the following is a decent package and I hope other steel and aluminum companies such as POSCO, Mittal etc. use this R & R as a starting point.]

The R & R parameters used by Tata Steel:

  1. Famiy definition: All major sons as on 1st January 2005 to be considered as separate famiy for R & R benefits.
  2. Plot in the Rehab colony: One homestead plot per expanded family. Each original family would get about 3 to 7 plots.
  3. House building assistance: Rs 1.5 lakhs per expanded family (as per the new definition). Each original family would get about Rs 4.5 to 10.5 lakhs
  4. Temporary accommodation: Rs 0.1 lakhs per expanded family. In addition, providing immediate shelter during construction of their houses at a cost of about Rs 10 crores.
  5. Transportation assistance: Free transportation of all househod materials, cattle etc.
  6. Employment: One nominated member from each expanded family. i.e., providing more than 1200 jobs for 679 original families. Cash-in-lieu (rs. 2 lakhs per family) for the older people upon their choice. Engagement provided during the construction itself.

An example scenario: Family of late Sukura Soren. Hamlet: San Chandia. Mouza: Chandia.

  1. Family Tree: Late Sukura Soren owned 2.79 acres of land including house site. He had three sons: Late Abhiram Soren, Madhu Soren (71) and Sinu Soren (60) . Abhiram Soren is survived by wife Tulasi Soren (56) and four sons Mansingh Soren (33), Mataram Soren (30), Manika Soren (25), Rajen Soren (43). Son of Rajen Soren is Ghana Soren (19).
  2. Number of expanded families = 8.
  3. Compenstation for two houses: Rs 0.74 lakhs
  4. Land Compensation: Rs 2.79 lakhs
  5. 8 numbers of 1/10th acre plot in the rehab colony worth – Rs 4.0 lakhs
  6. Total house building assistance – Rs 12.0 lakhs
  7. Temporary accommodation assistance – 0.80 lakhs
  8. Transport allowance – Rs 0.16 lakhs
  9. Maintenance allowance – Rs 1.92 lakhs
  10. Cash in lieu of employment for 3 persons – Rs 6.0 lakhs
  11. Total employment – 5
  12. Total Cash benefits – Rs 28.41 lakhs

Land prices and R & R: exploiting poor people? government incompetence? etc.

Bhubaneswar-Paradip, INDUSTRY and INFRASTRUCTURE, INVESTMENTS and INVESTMENT PLANS, Jagatsinghpur, Paradip - Jatadhari - Kujanga, R & R Comments Off on Land prices and R & R: exploiting poor people? government incompetence? etc.

Often many well-meaning people read about a particular R & R package for one location in one state and then compare it with R & R package and/or land prices offered in another state, in our case Orissa, and start making wild allegations that the Orissa government is incompetent in getting a good deal for its people or the company or foundation that wants to set up something is evil etc. etc. To make the obvious point, obvious to anyone who thinks rather than is driven by his/her preconceived ideology, that land prices vary across different locations in India, following are some data points.

(i) Hindu and Pioneer report about the Brahmani steel plant coming up in Jammalamadugu in Andhra Pradesh. There the Andhra Pradesh government has procured land at Rs 18,500 per acre for the steel plant which will need 10,640 acres. The government has also promised allotment of 3000-4000 acres for an airport at the price of Rs 9,000 per acre. The exact quotes from Pioneer are as follows.

The plant, to come up on an area of 10,640 acres, will be the second biggest plant after the Visakhapatnam steel plant making Andhra Pradesh the biggest steel producing State in the country. …

The Chief Minister denied any favouritism in providing land to the project and said that prices higher than market price was paid for the land. “The land has been purchased at the rate of Rs 18,500 per acre which is the highest in the district,” he said.

The quote from Hindu is as follows:

Announcing that BIL Managing Director Janardhana Reddy, an MLC in Karnataka, had agreed to construct a commercial airport nearby, he promised allotment of 3,000 to 4,000 acres of land at Rs. 9,000 per acre, half the price charged for land given to the steel plant.

(ii) On the other end of the spectrum following is an excerpt from Moneycontrol on land prices and compensation offered for land in Dankuni near Kolkata.

Construction giant DLF has offered to pay a whopping 55 lakh rupees an acre for acquiring close to 5,000 acres near Kolkata.

Never before has any company paid so much. Even the government paid up to 14 lakh rupees an acre in Singur, which is 20 kilometers away. DLF proposes to build an integrated township and a 100-acre SEZ. And the rehabilitation package it has promised, is awesome – guaranteed employment, alternative housing, education and even healthcare facilities for displaced farmers.

So what is our point? and Why is it relevant to Orissa’s growth and infrastructure development?

There are several land acquisitions going on in Orissa with respect to industries (POSCO, Tatas etc.), for Vedanta University, for various rail and road projects, etc. So when you come across a price or compensation package in another state and it does not gel with some other packages in Orissa that you have read about, please investigate more before getting all riled up and accusing the Orissa govt., its ministers, its bureaucrats, or the companies. They may as well be at fault, but please do research before deciding on it and shooting off emails or postings, as the above data points make it clear that land prices vary quite a lot among different locations in India.

Another point we want to make is that, Orissa has to balance between getting the best deal for its people (beyond the market price) and losing the project to another state. Again, the data point shows that there are other states who can offer very cheap land price and if Orissa asks too much (beyond the market price) then there is a real risk of losing the project. In case of steel and aluminium project, losing the project and consequently delaying in allotting certain mines may also mean that the mines may be allocated by the central govt to out of state companies. As a result Orissa will lose out on the value addition and on the infrastructure (such as roads, railway links, ports, townships, etc.) that are associated with large steel and aluminum plants.

A suggested approach to get the best deal for people (beyond the market price) losing their land is to have a central R & R policy that every state must follow, so that they don’t compete on the basis of who can offer the cheapest (relative to the market price of that particular location) land price and R & R. This can also be achieved if the relevant states (Orissa, Chhatisgrah, Jharkhand, etc.) agree on a common policy. (Sandip Dasverma, a friend, has often mentioned the later.)

[Acknowledgments: Deba Nayak of ornet for pointing to the Pioneer article in ornet. Participants of Orissa Today google group for engaging in multiple debates on this issue.]