The Centre would provide Rs716 crore under ‘Viability Gap Funding’ for infrastructure development of the PCPIR (Petroleum, Chemicals and Petrochemicals Investment Region) hub to be set up at Paradip in Orissa.

“The Centre would provide this money in two phases. While Rs388 crore would come in the first phase of the project, the balance Rs328 crore would be provided by the Government of India in the second phase”, an official source told Business Standard.

The funds to be provided by the Centre under ‘Viability Gap Funding’, will be utilized for various infrastructure projects of the PCPI hub like six-laning of NH-5 (A), building a greenfield coastal corridor, construction of all-new greenfield road from Bhubaneswar to Paradip \and upgradation of port infrastructure.

The six-laning of the NH-5 (A) will be taken up in the second phase of the PCPIR project at a cost of Rs76 crore. The greenfield coastal corridor will involve an expenditure of Rs410 crore out of which Rs 264 will be invested in the first phase while the remaining expenditure of Rs146 crore will be incurred in Phase-II.

The construction of all-new greenfield road from Bhubaneswar to Paradip will be taken up at a cost of Rs190 crore while Rs40 crore would be provided by the Centre for upgradation of port infrastructure.

Meanwhile, the Orissa government has committed an expenditure of Rs1796 crore on infrastructure development for the PCPIR hub. Out of the envisaged expenditure of Rs1796 crore, Rs 754 crore will be spent on development of arterial roads, Rs 465 crore on water supply, Rs 410 crore on power distribution and Rs136 crore on canal upgradation.

The PCPIR project in the state would be set up on 284.15 sq km (70,214 acres) of land spread over Jagatsnghpur and Kendrapara districts. The PCPIR hub is expected to attract investments to the tune of Rs2.74 lakh crore.

Phase-I work of the project is expected to be completed by 2015 while the entire project is scheduled for commissioning by 2030.

Of the expected overall investment figure of Rs2.74 lakh crore, the lion’s share would come from the petroleum and petrochemicals sectors at Rs2.3 lakh crore followed by housing and allied infrastructure at Rs23,500 crore, external infrastructure at Rs13,634 crore and Rs3,500 crore each for chemicals & fertilizers and ancillary sectors.

The mega project is set to create employment for 6.48 lakh people which includes direct employment for 2.27 lakh people and indirect employment for 4.41 lakh others.

The turnover of this PCPIR hub is estimated at Rs4.23 lakh crore with an export potential of Rs 43,000 crore. The PCPIR hub is expected to generate taxes to the tune of Rs 42,000 crore and contribute six per cent to Orissa’s Gross Domestic Product (GDP).

… This refinery cum petrochemical complex which needs 3300 acres of land, is scheduled for commissioning by March 2012.

The land acquisition process for PCPIR is on the fast track with the state owned Industrial Infrastructure Development Corporation of Orissa (Idco), the nodal agency for the project having filed requisition for 90 per cent of the total land requirement in .

This is really great. Especially, the part about a greenfield coastal road.  Odisha has been demanding such a road for a long time. I think eventually it will run all the way from Dhamara-Paradeep-Astaranga-Konark-Puri-Baliharchandi-across Chilika to Gopalpur. From Dhamara to the North they can put this road together with the National Waterway.

The PCPIR project in the state will be the fourth project in the country after West Bengal, Andhra Pradesh and Gujarat.The central government will provide rail connectivity, highway network and airports while the state government will provide the basic infrastructure, including power and water supply, said IDCO chairman, Priyabrata Patnaik.

This is huge. Rs 2.74 lakh crore is about $60 billion. Following is from a report in Business Standard.

Region spread over 284.15 sq Km to attract investment of Rs 2.74 lakh crore.

The Cabinet Committee on Economic Affairs (CCEA) today finally gave the green signal to the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) project in Orissa proposed to be set up near Paradip.

"There was a meeting in New Dehi on the PCPIR project of Orissa and the CCEA has approved the proposal”, state industries secretary Saurabh Garg told Business Standard over the phone from New Delhi.

Orissa has become the fourth state after Andhra Pradesh, Gujarat and West Bengal to have got the Centre’s nod for this prestigious project.

The PCPIR project in the state would be set up on 284.15 sq km (70,214 acres) of land spread over Jagatsnghpur and Kendrapara districts. The PCPIR hub is expected to attract investments to the tune of Rs 2.74 lakh crore.

Phase-I work of the project is expected to be completed by 2015 while the entire project is scheduled for commissioning by 2030. The Orissa government would invest Rs 1796 crore on infrastructure development for the project.

Of the expected overall investment figure of Rs 2.74 lakh crore, the lion’s share would come from the petroleum and petrochemicals sectors at Rs 2.3 lakh crore followed by housing and allied infrastructure at Rs 23,500 crore, external infrastructure at Rs 13,634 crore and Rs 3,500 crore each for chemicals & fertilizers and ancillary sectors.

The mega project is set to create employment for 6.48 lakh people which includes direct employment for 2.27 lakh people and indirect employment for 4.41 lakh others.

The turnover of this PCPIR hub is estimated at Rs 4.23 lakh crore with an export potential of Rs 43,000 crore. The PCPIR hub is expected to generate taxes to the tune of Rs 42,000 crore and contribute six per cent to Orissa’s Gross Domestic Product (GDP).

Indian Oil Corporation Ltd, which will be the anchor tenant of the region, will set up a 15 million tonne per annum grassroot refinery cum petrochemical complex five km south of Paradip at a cost of Rs 29,777 crore.

This refinery cum petrochemical complex, which needs 3300 acres of land, is scheduled for commissioning by March 2012.The land acquisition process for PCPIR is on the fast track with the state owned Industrial Infrastructure Development Corporation of Orissa (Idco), the nodal agency for the project having filed requisition for 90 per cent of the total land requirement in Phase-I.The Phase-I of the PCPIR project needs 48,268 acres (195.34 sq km) in all out of which 22,232 acres (89.97 sq km) would be devoted to processing facilities while the balance 26035 acres ( 105.37 sq km) is the area set aside for non-processing facilities. Phase-I of the project is scheduled to be taken up during 2010-2020.

The entire project which is set to be completed by 2030, needs 70,214 acres (284.15 sq km) of land which includes 30,397 acres (123.01 sq km) of processing area and 39.817 acres (161.14 sq km) of non-processing area.

Out of the processing area of 123.01 sq km, 41.95 sq km is under operational units and almost 42.68 sq km (10,546.22 acres) has been acquired or is under acquisition by Idco and the balance area of 38.38 sq km needs to be acquired.

Idco has filed for land acquisition of 7,342 acres (30 sq km) for common infrastructure, utilities and accommodating downstream chemical converters and industries.

The proposed 1700 km Surat-Paradeep natural gas pipeline is expected to be completed by 2014 for which bid will be invited within a week. Out of the total length of the pipeline around 400 km of pipeline will be laid in Orissa.

“The union government will invite bid for the Surat-Paradeep pipeline within a week and the process will continue for minimum 6 months. The winning company would be given 36 months to execute the project and it will be executed with an estimated investment of Rs.12000 crore" L.Mansingh, Chairman of the Petroleum and Natural Gas Regulatory said.

Similarly under the ongoing 1100 km Kakinada-Howrah natural gas pipeline project around 434 km pipeline is being laid in Orissa. 

Speaking at a special interaction session organized by CII ,he said that total about Rs.76,000 – 84,000 crore investment is estimated to be required for setting up Petroleum & Natural Gas infrastructure in next five years. Of this Rs.60,000-Cr would be required for natural gas pipelines,15000crore for CGD networks and 9000crore for petroleum product pipelines.

The pipeline Projects will avail cooking gas at an affordable rate in the state. For this the Gas authority has tentatively  identified 9  growth locations i.e.Bhadrak, Khurda, Kamakhyanagar, Rourkela, Anandpur, Bhubaneswar,Jajpur, Balasore and Baripada for development of CGD network terminals. The CGD network would involve the distribution of compressed natural gas (CNG) and liquified natural gas for domestic and automobile and industrial use.

… He acknowledged that timely completion of these two projects is very crucial for the success of the proposed Petroleum, chemical and Petrochemical Investment Region (PCPIR) in the state.

The Phase-I of the PCPIR project needs 48,268 acres (195.34 sq km) in all out of which 22,232 acres (89.97 sq km) would be devoted to processing facilities while the balance 26035 acres ( 105.37 sq km) is the area set aside for non-processing facilities. Phase-I of the project is scheduled to be taken up during 2010-2020.

The entire project which is set to be completed by 2030, needs 70,214 acres (284.15 sq km) of land which includes 30,397 acres (123.01 sq km) of processing area and 39.817 acres (161.14 sq km) of non-processing area.

Priyabrata Pattnaik, chairman and managing director of Idco said, “Idco has filed requisition for acquisition of 90 per cent of land needed for the first phase of the PCPIR project. Out of the processing area of 123.01 sq km, 41.95 sq km is under operational units and almost 42.68 sq km (10,546.22 acres) has been acquired or is under acquisition by Idco, balance area of 38.38 sq km needs to be acquired.”

He was speaking at an awareness session on ‘Regulatory Framework of Petroleum and Natural Gas Regulatory Board (PNGRB) for Petroleum and Natural Gas Sector’, organized by the Confederation of Indian Industry (CII).

Of the non-processing area of 161.14 sq km, 20.92 sq km (5169.33 acres) are village settlements which has been integrated in the non-processing area and existing township of 19.08 sq km ( 4714.66 acres) included in the non – processing area.

Idco has also filed for land acquisition of 7,342 acres (30 sq km) for common infrastructure, utilities and accommodating downstream chemical converters and industries.

Meanwhile, as a part of developing rail connectivity within the PCPIR hub, it has been decided to set up rail freight stations (RFS) along with additional rail sidings at a total cost of Rs 80 crore in Phase-I and Rs 120 crore in Phase-II.

In Phase I, the RFS will be along Cuttack-Paradeep line which further connects to Paradeep port and Chennai-Howrah trunk whereas in Phase II, the RFS will be along Paradeep-Haridaspur line joining Chennai-Howrah trunk. The PCPIR project at Paradip is awaiting the in-principle approval of the Cabinet Committee on Economic Affairs (CCEA). After Andhra Pradesh, Gujarat and West Bengal, Orissa would be the fourth state to receive the approval for this prestigious project.

Indian Oil Corporation Ltd (IOCL) would be the anchor tenant of the project and it would set up a 15 million tonne per annum grassroot refinery cum petrochemical complex five km south of Paradip at a cost of Rs 29,777 crore. The refinery project is expected to be commissioned by March 2012 and stabilized by November 2012.

But Pathan, and scores like him who live in the shadow of a new factory built by Tata Motors to make its ultra-cheap Nano car, are the beneficiaries of the race to transform India from a nation of small farmers to an industrialized power.

… Against this backdrop of strife, Pathan’s story is the ideal of what could be achieved if the more than 50 percent of Indians who live off the land get a real stake in the new economy. It’s a principle that advocates of market capitalism and human rights activists can agree on, but that often fails to materialize across rural India, where stories of powerful business interests and corrupt officials conspiring to throw poor farmers off their land are all too common.

Around the Tata plant in Sanand, in the western state of Gujarat, people have begun to talk of the "Nano effect."

Go down a narrow lane that runs to dirt not 15 minutes from the factory and amid the gamboling goats of Chharodi village, you will find 25 new homes.

Property prices have risen sharply — from 50 to 400 percent — and men are making fortunes brokering land deals.

The village head says three dozen of the 3,000 people in Chharodi have gotten work from contractors. The Nano factory hasn’t given them jobs directly, but it has offered a toehold in the industrial economy. They remain farmers, but a growing part of their income comes from informal business ventures or work for contractors.

Pathan and his three brothers sold the government one-third of their family farm to make way for the Nano plant. They were paid 20 million rupees ($432,900) — a fortune even in Gujarat, one of India’s richest states.

Ask the Pathan brothers what they did with this money, and they grin like schoolboys.

They bought 2.7 hectares (6.6 acres) of land — more than doubling their initial landholding — three kilometers (two miles) away, where they are preparing to plant their first crop.

They bought seven tractors and three Bolero jeeps, which they use for contracting work at the Nano site, raking in 455,000 rupees ($9,848) a month.

They are rebuilding their family home. Gone is the mud and thatch. Today their angular concrete two-story is the biggest on the block.

"You’ve done a damn good job out here," Pathan says of Ratan Tata, who heads the Tata group’s sprawling industrial empire.

The underlined part above is an important part. If the land losers are paid multiple times the "current" value of their land, in most places they can easily buy more than that amount of land within a few kms.

Following is an excerpt from a Nageswar Patnaik article in Economic Times. 

There is something to cheer about for the families displaced by the Tata Steel Project at Kalinganagar. These families have achieved zero dropout rate at elementary school level, sustainable environment, poverty eradication, increase in literacy rate, gender equality, empowerment of women.

The achievers of these challenging Millennium Development Goals (MDGs) are not highly educated and extraordinary urbanite people, but ordinary members of self-help groups residing in rehabilitation colonies at Kalinga Nagar in Orissa’s Jajpur district.

Helped by country’s major steel producer, Tata Steel, the self-help groups called Tata Steel Parivars (TSPs) have successfully ensured that all children living in the colony went to the school and got education. Tata Steel is setting up of a 6-million ton per annum integrated steel plant at Kalinganagar Industrial Complex at Kalinga Nagar in Jajpur district.

“The noteworthy achievement of Tata Steel Parivars [TSP] at Kalinganagar is that those families have achieved the target of 100% elementary education with zero school drop out rate,” says Sukanta Rout, an educationist who played a crucial role in motivating the children, mostly tribals, to go to the school.

As many as 159 tribal children have been enrolled in the residential schools in Jajpur district. Similarly, 50 children have got the opportunity of studying in one of the premier schools of the state – Kalinga Institute of Social Science (KISS), here. As many as 213 children are studying in schools as day scholars.

Simultaneously, there is significant jump in the literacy levels of the TSPs from 45% in 2005 to 65% in 2010.

Most significantly, there has been an incredible and drastic change in the will power of women of these relocated families. The empowered women community are now self-employed and going overboard for what they are doing. They have engaged themselves in poultry farming, gardening, stone carving, saura painting and in setting up of small industries like phenyl and pickles.

“A few years before, we were quite poor, – we did not have money to even buy food, let alone send our children to school. Now with own our income, we are not only meeting our day-today expenses but also support our school and college-going children,” says Jamiti Mahanta, head of an SHG group.

If the industries that are coming up in Odisha, such as POSCO and Vedanta, can be made to do the above and perhaps more then it will be a win-win situation for all. POSCO’s current package seems to be a step in the right direction. Following is an excerpt from a Business Standard article on that.

Posco, the biggest foreign direct investment (FDI) in India at $12 billion (Rs 54,000 crore), has offered the largest ever compensation package in the country for the displaced and landless farmers.

The Rs 400 crore compensation — part of its estimated project cost — announced by Posco India for Orissa, is expected to benchmark industry relief in the country. The package will benefit over 2000 encroachers and landless labourers at the Posco site.

While Rs 100 crore will be provided for the acquisition of government and private land, Rs 100 crore will be given towards building a rehabilitation colony and Rs 200 crore as compensation to encroachers of government land.

The move – including encroachers of government land and landless labourers earning their livelihood from the area – was beyond the prescription of the state or national rehabilitation and resettlement (R&R) policies.

While fixing the price of private land at Rs 17 lakh per acre, the Rehabilitation and Periphery Development Advisory Committee (RPDAC) for the Posco project announced a compensation of Rs 11.5 lakh an acre for the loss of betel vines, most of which are on government land. There are about 1,877 betel vines in the site covering 300 acres.

Landless labourers working in the betel vines will get 20 per cent of the total compensation for the loss, which is over and above the amount paid to the owners of the areas where betel is grown.

Similarly, RPDAC has prescribed assistance of Rs 2 lakh per acre for owners of the prawn gheris — most of which are operating on government land — and Rs 1 lakh an acre for farmers using government land for agriculture.

In a never-before step, the South Korean steel giant’s package will pay an unemployment allowance of Rs 2,250 a month to the landless labourers, who will lose their livelihood following the acquisition, till they are provided job by the company. Capping it all, RPDAC has decided to provide alternative housing to families who had encroached and built their houses on government land.

In comparison, the compensation package for sharecroppers or landless labourers in Bengal’s Singur was 25 per cent of what the land owner received — for a single-crop Rs 2 lakh and Rs 3 lakh for double-crop farmland. In Nayachar, the West Bengal government had promised to rehabilitate 100-150 fishermen families who had encroached upon government land — the site for a chemical hub.

The rate is also more than what neighbouring Chhattisgarh is offering. The government there recently hiked the compensation to Rs 10 lakh for an acre for two-crop farmland, Rs 8 lakh an acre for single-crop un-irrigated land and Rs 6 lakh for barren land.

The captive mines given to these companies and the royalty rate is a different issue. I believe that currently the royalty given to the state is too little.

Topping the lists of the prospective investors is Gokul Agrawal of CTC Education Pvt Ltd who intends to invest Rs 6000 crore over five years in developing a 1000-acre knowledge city.

In the higher education sector, Silicon University of the Silicon Valley Group has proposed to set up its campus in the state at a cost of Rs 300 crore. Investments would also be pouring in for the state’s hospitality sector with the US-based Best Western Hotel lining up a Rs 100-crore investment plan for setting up a chain of properties at Bhubaneswar, Paradip, Chilka and Jharsuguda.

Land could become an issue with respect to the proposed knowledge city. A city/town/community that may want such a knowledge city which, I am told, would include multiple universities could offer help in the land part. They should of course first investigate if the group really has that much money and if their plan is for real.

The Western Industrial Belt.

The Southwestern & Central Outposts.

• Berhampur-Gopalpur to the south (with a then population of 1.5 million; about 145 kms away)
• Puri to the south (with a then population of 700K; only 30kms away)
• Kalinganagar to the North (with a then population of 500K; only 50 kms away)
• Talcher-Angul to the West (with a then population of 500K; only 110 kms away)
• Dhenkanal to the west (with a then population of 200K and almost in the periphery)
• Paradip to the east (with a then population of 400K and 90 kms away)
• Dhamara-Chandbali to the Northeast (with a then population of 200K and 140 kms away)
• Bhadrak to the North (with a then population of 200K and 140 kms away)

A little farther is

• Balasore-Chandipur to the North (with a then population of 300K and 162 kms away from the Northern end of Bhubaneswar-Cuttack-Khurda area)

In addition there will be several port towns other than the ones mentioned above and a few smaller towns (For example, Nayagarh)  within 200km radius of greater Bhubaneswar.

Besides individual CDPs for these areas the Odisha governement should start making plans for this larger overall area. It would form a different kind of megalopolis than New Delhi, Mumbai or Kolkata with a well planned hub (Bhubaneswar) surrounded by mini-hubs and with rural areas in between. I can not off-hand think of another such area in the world; may be the readers can point me to some. Please suggest what kind of plans need to be made. (Please note that for something to be up and running in 20 years, plans need to be made now.) For example:

• Commuter trains at frequent intervals and the necessary infrastructure for that. Following are some of the segments
  • Bhubaneswar-Puri-Konark-Astaranga (Puri-Konark-Astaranga needs to be built; alternatively if Astaranga port comes up, then there may be a new line from Barang to Astaranga)
  • Bhubaneswar-Berhampur-Gopalpur (Berhampur-Gopalpur needs to be built)
  • Bhubaneswar-Jajpur Rd(Kalinganagar)-Bhadrak-Dhamara (Bhadrak-Dhamara is ready but no trains yet)
  • Bhubaneswar-Jajpur Rd(Kalinganagar)-Bhadrak-Balasore-Baripada
  • Bhubaneswar-Jakhapura(Kalinganagar)-Tomka (on the line to Kendujhargarh)
  • Bhubaneswar-Cuttack-Paradeep (ready)
  • Bhubaneswar-Dhenkanal-Talcher-Angul (ready)
  • Bhubaneswar-Khurda-Nayagarh and beyond (being constructed; part of Khurda-Balangir)
  • Angul-Talcher-Sukinda-Kalinganagar (being constructed)
• Expressways linking these places
• Fast buses linking these places
• Fast airport shuttle
• Some of these places would be connected by waterways including National Waterway 5
• Express ring road around each of these places
• Co-ordinated public transport in each of these places
• ??

Please let your imagination run wild!

Buoyed by successful resettlement of displaced persons after five years, Tata Steel, which is setting up a 6-mtpa steel plant at Kalinga Nagar in Orissa’s Jajpur district, has undertaken massive infrastructure development work at the project site to get support of the local people, especially the tribals.

Under its Tata Steel Parivar resettlement and rehabilitation (R&R) programme, the leading steel producer of the country has laid 20 km of quality motorable roads connecting all rehabilitation colonies, besides constructing 32 km of drainage system at adjoining tribal-dominated villages such as Trijanga, Sansailo and Gobarghati.

As many as 300 sodium vapour halogen lamp posts have been installed and pipe water provision made to provide better life to the displaced people living in rehabilitation colonies.

Each colony in the project area has a dispensary, community centre and several education centres offering management and technical courses.

“The Tata Steel Parivar rehabilitation scheme at Kalinga Nagar provides substantially better facilities than the government-framed R&R policy. The government policy provides employment for one member from each core household. On the other hand, Tata Steel Parivar policy provides employment opportunities for each major member of the core house. It also provides training facilities for technical skill upgrade,” a press statement, issued by the company here on Thursday, said.

The release also noted that scholarships were being provided for displaced persons pursuing higher education in professional fields such as medicine, engineering and management.

“An amount of Rs 2.21 lakh is also provided as onetime assistance in lieu of employment. Further, under the Tata Steel Parivar policy, each family is given a monthly maintenance allowance of Rs 2,000-2,300 till they get employment in the plant whereas the policy stipulates payment of maintenance allowance for 12 months only,” it added.

The opposition in Kalinganagar has finally seen light and allowed the Tatas to build the infrastructure of Kalinganagar. Related to this, The Telegraph of UK has apologized to the Tatas for their negative coverage.

Things also seem to be going in the positive direction in the POSCO front and I hope the people there visit Tata’s colonies in Kalinganagar and demand and get similar or better facilities and form a positive partnership with POSCO. In addition the Odisha government should push POSCO in developing a POSTECH like University in Paradeep.

However, there is not much progress with respect to Vedanta Aluminum in Kalahandi or Vedanta University in Puri. Here again it would be wise for the people there to visit Tata’s colonies Kalinganagar and demand and get similar or better facilities and form a positive partnership with Vedanta. But the time may be running out for Puri as Vedanta University Project has indicated that it may give up and move south where it will be welcomed with open arms. If that happens it would of course be a mistake of a century for Puri and Odisha.

In regards to the Arcelor-Mittal and Keonjhar the company really has not made much visible effort to woo the people.