POSCO - WHO SUBAH KABHI TOH AAYEGI.....
By Ruma Dubey
It was 22nd June 2005. India was brimming with new found optimism and there was a feel-good factor all around. This day was a sweetener- it marked India on the global map; the state of Odisha (Orissa then) signed India’s largest FDI deal – a $12 billion project with Posco for setting up a 12 million tonnes per annum steel plant. It was a big win for India and for Odisha. Posco was touted to be the marquee project which will attract more FDI, like bees to honey.
Now, almost 11 years later, Posco has become India’s shame. It has become a reflection of why not to do business in India!
The latest news from Posco remains as disturbing as ever. It is 2016 April; the project size has been cut down to 8 MTPA and the land required has been halved from 4004 acres to around 2700 acres. Yet, there has been no go-ahead. In fact for the past two years, there has been no work at all.
The company is facing issues from all sides – no availability of land, evnvironmental issues, getting no forest clearances, tribals waging a protest and not to mention various political upheavals. Thus, right from social, environmental, political, economical – the company had seen it all. Sadly, it is yet to move ahead or break through any of these obstacles.
Posco issued a statement to the National Green Tribunal (NGT) on Sunday that its Odisha project cannot proceed any further at this stage due to regulatory hurdles, that it was yet to receive land and forest clearance. Funnily, which is so typical of this-can-happen-only-in-India syndrome, the company stated that the environmental clearance that it got was valid only up to 19th July 2017. But this validity is useless as it has not got any land to work on! The Govt is yet to hand over the promised land to Posco. More funny – what is the point of the environmental clearance when it is yet to get forest clearance? Thus one regulatory hurdle after the other, it has been a long, long battel for the company.
If one may recollect, in 2013, Posco had pulled out of Karnataka- a proposed $5.3 billion steel plant. There too the reason was non-availability of land.
What is disturbing is that it has taken 11 years and the end still does not seem to be in sight. This, especially now, when India is trying its level best to move up the Ease of Doing Business ladder. What kind of a message does this send out to others wanting to come to India? As per the latest data available on stuck projects – as reported by Mint, the value of all stalled projects in the March quarter rose to Rs.11.36 trillion from Rs.10.79 trillion in the December quarter.
Usually, the Ministry of Statistics and Programme Implementation or Mospi as it is more popularly recognized as, presents a Flash report on project status at the end of the calendar year. There was an update at end of 2014 but nothing at end of 2015. For more insight, go to: http://www.cspm.gov.in/english/flr/FR_Jan_2016.pdf
The Govt itself runs a website - Infrastructure & Project Monitoring Division (IPMD) and this apex monitoring institution is supposed to give us a Flash report - Monthly Flash Report on Central Sector Projects (Rs. 150 crore and above) as well as Monthly Flash Report on Mega projects (costing more than Rs.1000 crore), in which the projects with time and cost overruns are flagged, is brought out every month. Over and above this, there is also a detailed Quarterly Project Implementation Status Report which is supposed to be published. Go the website and you will realise that the ‘Flash Report Updation’ button simply does not work! You maneuver your way through the site and somehow get to ‘Flash Report’, the latest updation is Jan’16.
And this Flash Report of January 2016 states that of the 1063 Central Sector Infrastructure Projects costing 150 crore and above 346 projects are delayed with respect to original schedule and 53 projects have reported additional delay vis-à-vis the date of completion reported in the previous month. Of these 53 projects, 13 are Mega Projects costing 1000 crore and above. Further, 35 projects have been sanctioned without original commissioning schedule date and for 422 projects neither the year of commissioning nor the tentative gestation period has been reported.
It has also listed out the reasons - delay in land acquisition, delay in forest clearance, delay in supply of equipments, fund constraints, geological surprises, problems in equipment erection, geo-mining conditions, slow progress in civil works, shortage of labour, inadequate mobilization by the contractor, maoist problems, court cases, contractual issues, law and order situation etc.
Yes, India is too huge a market to ignore and companies, despite the 10-11 or more years of delay do not pack up and leave. But that does not justify the delay. If we need to make things work, we really to first get projects like Posco going.
This is shameful, especially now when the whole world is watching us; any small negative report gets magnified and thus we need to allow actions to talk; enough of mere talk!