The Tata Group on Wednesday committed major investments in Orissa in steel, tourism and the information technology sectors.
Three separate Memorandum of Understandings were signed between representatives of the Tata Group and the Orissa government, whose combined worth is estimated at about Rs 17,000 crore (Rs 170 billion).
The MoUs were singed in the presence of Tata group chief Ratan Tata and Orissa Chief Minister Naveen Patnaik.
Tata Steel signed a MoU for setting up a six million tonne green field integrated steel plant at Duburi in the Jajpur district at an estimated cost of Rs 15,400 crore (Rs 154 billion).
The plant will come up in two modules of three million tonne each. The first phase is scheduled to be completed in 48 months followed by the second module, which has been slated to be completed in 24 months.
The state government has agreed to provide 2000 acres of land at the present industrial complex at Duburi and allocate an additional 400 acres for a township from the second phase of the Duburi industrial complex. The state government has also agreed to provide required power and water for the plant.
Iron ore requirement for the plant in its two modules has been assessed at 250 million tonnes for a period of 25 years.
The state government has assured making available adequate iron ore for the plant after taking into account the total requirement of Tata Steel and the iron ore reserve available with the group.
The raw material allocation will be done after the project crosses specific milestones in terms of investment.
The plant is expected to become operational by 2008 and is expected to take advantage of the port facilities being developed at Dhamra in which the Tata group holds a stake.
The MoU for the steel project was signed by B Muthuraman, MD, Tata Steel and Bhaskar Chatterjee, secretary steel and mines, Orissa government.
A separate MoU was signed between TCS and the IT department of the state government for starting a major IT development center of TCS at Infocity, Bhubaneswar.
The centre will cover both software development and IT enabled services and will come up over an area of 45 acres. TCS will invest about Rs 40 crore (Rs 400 million) in building the centre.
The state government has agreed to provide necessary infrastructural support and facilitate all clearances required for implementation of the project through its single window organization namely Orissa Computer Application Centre backed by the department of IT.
This centre is expected to have developers and other professionals numbering about 1000 in first phase. The MoU for the IT venture was signed by Ramadurai, MD, TCS and AK Tripathy, secretary IT, Orissa government.
The Tata group, which is a major player in the hospitality business in the country also committed major investment in tourism sectors of Orissa by signing a separate MoU for setting up of 4 units of their budget category hotels under the brand name IndiOne. These four hotels will be set up at Bhubaneswar, Konark, Puri and Paradeep and to start with will have a capacity of 100 rooms each.
This apart, the Tata Group will also help the state government in preparing the concept plan and a vision document for developing a special tourism area south of Puri towards Chilka across Mangala river and near Konark. The MoU for the tourism project was signed between Krishna Kumar, vice chairman, India Hotels and AK Tripathy, secretary, tourism of Orissa government.
On the utilisation of 3700 acre land acquired by Tata Steel at Gopalpur for its jinxed steel project in mid 90s, chief minister Naveen Patnaik said, the company will set up a cold rolled unit over 500 acres of land there at a cost of Rs 500 crore (Rs 5 billion).
Besides, Tata Steel also intended to form a special purpose vehicle along with the state government for establishment of special economic zone in the area. The company, meanwhile, has started construction of a technical training institute at Gopalpur for imparting training to young boys and girls on steel making technology.
Patnaik said, the Duburi steel plant of Tata Steel will provide direct and indirect employment to about 10,000 people.
Tata Steel has also drawn up plans for development of Gopalpur region where it is in possession of 3200 acres of land acquired by it for its earlier proposed steel plant. It proposes to set up a Technical Training Institute at Gopalpur and work with the State Government to help set up an SEZ on a part of the land.
The Technical Institute, which is already under construction, is likely to start with its first batch of trainees by June 2005. It will train about 200 children in the age group of 16 to 20years having minimum High School qualifications. This institute will provide trained human resources for fast growing steel and related industries in Orissa.
A pre-feasibility study for setting up SEZ has been completed and an SP V is now to be formed between Government of Orissa and Tata Steel to progress the matter further. Tata Steel also proposes to setup a Cold Rolled Steel Processing Centre at Gopalpur as part of forward integration of its Kalinganagar Steel plant at a cost of around Rs. 500 crore (Rs 5 billion).
Muthuraman said, "Our first task now is to obtain all statutory clearances with the help of Government as fast as possible and start the work. We have undertaken a challenge of setting up the steel plant within 48 months from today including the time required for obtaining the statutory clearances. We are confident of crossing relevant milestones for finalizing the arrangements for securing adequate iron ore as agreed in our MoU with the State Government. In order to complete the construction of such large steel plant with 48 months we are immediately putting in place a project team at Bhubaneswar with effect from tomorrow."
Tata Steel has already signed a joint venture agreement with L&T to develop a deep water port in Orissa at a cost of around Rs 1500 crore (Rs 15 billion) to ensure availability of world class port infrastructure to support the steel plant.
Ratan Tata said, "This steel plant and the port project along with the investment being planned by Tata Consultancy Services and the Taj group of Hotels is a concerted effort by the Tata Group to increase its presence in Orissa.
"These investments combined with able leadership and efficient administration in the state would provide the right impetus to the speedier industrial development of the state and will bring prosperity to its people. These projects will also strengthen the 100 year old ties between Orissa and Tata's for 25 years is estimated at 240 million tonnes although the Tatas in their project proposal submitted to the state government have asked for allotment of captive leases with 540 milion tonne iron ore reserve.
But their existing leasehold of 630 million tonne of reserve being more than double the 25 years raw material requirement of 240 million tonnes, the policy guideline of the state government does not allow for any further captive mines allotment to the company for the Duburi project.
Similarly, the JSPL proposes to set up a two million tonne steel plant at Deojhar in Keonjhar district. Its iron ore requirement for 25 years is estimated at about 80 million tonnes. However, the state government records show that JSPL has controlling interest or long term arrangement with Thakurani B mines owned by SL Sarda and ML Sarda in the Keonjhar district.
The previous chief secretary of Orissa, PK Mohanty, who retired only a couple of months back, in his file notings has mentioned that "It almost appears, the entire sized ore raised during 2001-02, 2002-03 and 2003-04 by the lessees and apparently crushed by Jindal Steel and Power has been sold to the Raigarh plant owned by the latter".
Thakurani B has huge reserve of about 270 million tonne of iron ore. Jindal Steel and Power has separately applied for mining lease of Thakurani A having an estimated reserve of 270 million tonne of iron ore for setting up a steel plant at Deojhar.
"While a formal decision on the request for the mining lease could be taken separately, it will be worthwhile to suggest that the application by Jindal Steel and Power for mining lease of Thakurani A should not be considered as it is obvious that they have already access to the iron ore of Thakurani B through SL Sarda and ML Sarda as otherwise other potential investors in steel plant sector in the state will be debarred from having access to the huge reserve of Thakurani area, which will not be in the best interest of the state", the former chief secretary noted.
