VAL Lanjigarh among 3 mega projects have gone into production out of 14 mega industries signed MoU with Orissa Government

Orissa asks mega projects to file progress milestones
Business Standrad, Sept 18, 2009

The Orissa government today asked the mega industries, which had signed memorandum of understanding (MoU) with it for setting up of projects, to submit reports on milestones achieved by them regarding the progress of their projects.

It also asked all the industries to set up at least one ITI in their areas of operations and promote ancillary and downstream industries. At the same time, the government assured to provide the required support to the companies for land acquisition, water allotment and resolving the resettlement and rehabilitation issues.

This followed a high level review meeting of the 14 mega industries which signed MoU with the state government between 2002 and 2006. Out of these, only 3 projects have gone into production.

These are alumina refinery and smelter project of Vedanta Aluminium Ltd (VAL), steel project of Bhushan Steels Ltd and Bhushan Power and Steels.

Vedanta’s one million tonne per annum (mtpa) alumina refinery at Lanjigarh and 0.5 mtpa smelter at Jharsuguda have gone into production. Similarly, the steel project of Bhushan Steels Ltd (BSL) has attained 0.5 mtpa steel production and set up a one mtpa sponge iron and 110 Mw captive power plant (CPP) near Dhenkanal.

On the other hand, Bhushan Power and Steel’s steel project located at Lapanga in Sambalpur has attained 0.6 mtpa sponge iron, 0.8 mtpa blast furnace, and 1.5 mtpa steel making and 0.90 mtpa HR coil capacity along with establishment of 116 Mw CPP.

The mega projects, which were able to make some headway in land acquisition included 1320 Mw thermal power project of Jindal India Thermal Power Ltd (JITPL), 6 mtpa steel project of Tata Steel, alumina refinery and smelter project of Aditya Aluminium Ltd and 6 mtpa steel plant of Jindal Steel and Power Ltd (JSPL).

However, the 12 million tonne greenfield steel project of Posco India and the 12 mtpa steel plant project of Arcelor-Mittal are yet to take off.

While Posco has been handed over 506 acres out of the required 6000 acres, Arcelor-Mittal couldn’t start the land acquisition process due to opposition of the local people. Sterlite Iron and Steel Ltd, proposing to set up a 5 mtpa steel plant at Palaspanga in Keonjhar district, has also not been able to acquire any land for its project. The meeting also took note of the issues like land acquisition, availability of water and electricity and rehabilitation and resettlement of the affected persons.

Talking to the media after the meeting, state steel and mines minister, Raghunath Mohanty said, all the companies have been asked to provide milestones on their project and take steps to start the construction work at the earliest. While the companies will expedite the land acquisition process, the state government will extend the required co-operation. Posco and Arcelor-Mittal projects have not taken off due to land issues.

He said, these 14 mega units, envisaging an aggregate investment of Rs 2,06,481 crore and 61.8 mtpa of steel capacity, have invested about Rs 27,031 crore so far. While they required 47,607 acres of land, they were handed over about 15,814 acres which is about 33 percent of the total requirement. About 26,725 persons were employed by these industries, he added.

Sources said, the minister expressed his unhappiness over the lack of progress of the Special Economic Zone (SEZ) project of Tata Steel at Gopalpur and non-use of the land given to the company at Nayagarh in Keonjhar district. It was asked to give milestones on its Kalinganagar project, the work on which is yet to start.

Similarly, Uttam Galva Steels, which signed MoU with the Orissa government in 2006 for setting up of a 3 mtpa steel plant at Palaspanga in Keonjhar, was pulled up for slow progress. The company has acquired only 27.81 acres out of the required 2150 acres of land.

Out of the proposed investment of Rs 8987 crore, the company has so far invested only Rs 55.06 crore. The progress of the 3 mtpa steel project of Welspun Power and Steel was also found to be unsatisfactory. On the other hand, Posco was advised to talk to the local people to expedite the land acquisition process, sources added.