Mega greenfield steel projects announced in the country are set to add more than 100 million ton of capacity, but land acquisition activity for only 16 million ton has begun.
With this kind of a roadblock and uncertainty, the steel ministry has decided to project a capacity of 124 million ton by 2011-12 mostly on the basis of brownfield expansion. High profile foreign ventures like those of Korea's Posco and Mittal Steel have not been into consideration.
The steel projects are mostly spread across the iron ore rich Orissa, Jharkhand, Chhattisgarh and West Bengal. Ironically, one of the more fortunate projects is Sajjan Jindal-promoted JSW Steel's 10 million ton plant in West Bengal, the state which has seen the most protests against land acquisition.
Albeit initial acquisition problems the other project to make headway is Tata Steel's Kalinganagar project in Orissa. The company was the first to face violent agitations from those displaced.
Biswadip Gupta, joint managing director and chief executive officer, JSW Bengal said acquisition of only 42-50 acres of the privately held 500-acre component of the total 4,000 acres required for the project remains. Gupta hopes to complete the process by year-end.
Industry sources pointed out that Jharkhand, where none of the companies has made any progress, has emerged as a major laggard. The state is yet to come out with a rehabilitation and resettlement policy.
Jharkhand accounts for around 22 million ton, 40 per cent of the total new capacities announced by steel companies. While the state has made some progress in raw material allocation, the R&R policy, drafted about a year ago, is yet to be ratified. Jharkhand's biggest greenfield project investors are Tata Steel, Mittal Steel India and JSW Jharkhand.
In Orissa, too, the primary impediment appears to be land acquisition. The first phase of Posco's 12 million ton project has been delayed by a year.
"Of the total requirement of 4,004 acres, the company has secured 512 acres of government non-forest land. The MoU for the Posco project was signed in mid-2005," a Posco spokesperson said.
Jindal Steel & Power has initiated the land acquisition process in Orissa for its six million ton project, albeit with delay. Vikrant Gujral, chief executive officer, JSPL said, "We have got more than 1,000 acres for the project." The total requirement is of around 5,000 acres.
Mittal Steel has identified the land in Orissa and is in the process of drafting its rehabilitation scheme. The 12 million ton steel plant at Keonjhar will require around 8,000 acres, which includes 1,000 acres for a captive power plant and 1,000 acres for a township.
The other mineral-rich state to bag some major projects is Chhattisgarh. Tata Steel has lined up a five million ton project, while Essar has a four million ton plant in the pipeline.
Tata Steel sources said cheques for 1,125 acres of the required 5,000 acres have been disbursed to the beneficiaries. According to industry sources, acquisition of the balance area is facing stiff resistance from the locals.
