Steeling For A Fight

WHEN, at the 89th Tisco annual general meeting in July, Chairman Ratan Tata threatened to relocate the company's prestigious 10-million-tonne expansion project at Gopalpur away from the state of Orissa if he had to, he was probably just being rhetorical. For, inside the state secretariat at Bhubaneshwar and Tisco headquarters at Jamshedpur, things were moving at a frantic pace. Barely two weeks later, 14 MLAs from Ganjam district of Orissa were signatories to the document approving the plant site, and Project Gopalpur was on.

At stake is Rs 35,000 crore of investment that is to flow into Ganjam over the next decade. At stake is also the livelihood and residence of over 26,000 locals who will be uprooted and displaced to accommodate the steel plant. 

For, the proposed project threatens to eat into 7,500 acres of lush coastal area of rice fields, coconut groves, and plantations of banana, mango and the aromatic flower kewda, which is the source of livelihood of most of the locals ( see box, page 50 ). This land will house the plant, colony and rehabilitated locals. More than 11 villages and a few hamlets will have to be uprooted. Says B. Muthuraman, vice-president in charge of Project Gopalpur: "A 10 mt plant requires a contiguous area of minimum 2,500 acres in the shape of a square or a rectangle." 

Spearheading a 14-month struggle by the locals for relocation of the project, the 14 MLAs had proposed three alternative sites, all of which were rejected by Tisco executives in front the chief minister and the state government officials. But the state's consequent comedown has cleared much of the obstacles in the face of the project, though local resentment still remains.

In a sense, the Gopalpur project is the future of Tisco. The company's 3 mt Jamshedpur plant is too outdated to be rescued by the ongoing modernisation. Expansion at Jamshedpur is ruled out because the town circles the plant and material movement is difficult. The Gopalpur project, on the other hand, is skirted by the Calcutta-Madras NH5 and the Madras-Howrah rail link. Says Muthuraman: "After scrutinising 22 sites, we decided on Gopalpur. It's close to the sea, only 2 km from Gopalpur port and the iron ore is just 300-400 km away at Mankadnacha in Baliapahar." 

Indeed, proximity to the port is the main factor that prompted the choice of Gopalpur. "The savings in freight cost alone make it the ideal site," says J.J. Irani, managing dirctor, Tisco. In the past 30 years, 14 of the world's 17 integrated steel plants of over 3 mt capacity, have been located on the coast. Says Muthuraman: "It will cost $30 (over Rs 1,000) to transport a tonne of steel from Gopalpur to Bombay by road, while by sea, it'll be only $7-8 (Rs 250)." Again, for a 10 mt integrated plant, 35 mt of raw materials have to be moved every year. Tisco will import 4 mt of coke from Australia, and 17 mt more of iron ore will come via Paradip port. Tisco will use a by conveyor belt from the port straight to its blast furnaces.

 It was clear that the villagers had a losing battle on hand as they had little cooperation from the state Congress government. Orissa has been waiting a long time for a steel plant. In 1975, the then prime minister Indira Gandhi was believed to have promised the state a steel plant as a Durga Puja gift. SAIL, however, failed to deliver. Former chief minister Biju Patnaik came close to the goal through NRI Swraj Paul, but the latter fell out with the Industrial Development Bank of India. Patnaik, once owner of Kalinga Steel, then managed to bring in M'esco for a small plant at Daitari and, more importantly, sign an MoU with Tisco. Naturally, Patnaik's successor is keen to implement the MoU.

 A survey of eight villages has been completed, but in the remaining six, temperatures are running high. And the Left parties have promoted the Gana Sangram Samiti (GSS) in order to oppose the Gopalpur project. Demands Shivaji Patn-aik, ex-MP and member of the state secretariat of the CPI: "Why should the government negotiate on behalf of the Tatas?"

 Led by Narayan Reddy of the CPI(M), the GSS has succeeded in virtually stopping all survey work. Roads leading to the villages have been barricaded to stop entry of government and Tisco officials. Tisco employees have been manhandled and their vehicles damaged. And for fear of vandalism, the company has removed the foundation stone, laid by former prime minister Narasimha Rao. The Outlook team was mistaken for Tisco officials and told to clear off the site. A few villagers screamed: "Even if our heads are chopped off we won't move from our homeland."

 Interestingly, the villagers seek only a relocation, the project itself is very much in demand. Says Ali Kishore Patnaik, member of CPI(M)'s Ganjam secretariat: "People initially welcomed it. We are still not against the project. What we are suggesting is that it be located 10-14 km away." Counters Muthuraman: "One of the alternative sites proposed will displace more than the present 25,000 people. The second is cyclone-prone, while the third is too far from the port. Any other site will make the plant unviable." Tisco estimates a cost hike of Rs 70-80 crore per km in case of relocation.

The other bone of contention is the compensation for the land and houses. Tisco had proposed to give each family the market value of the land plus 42 per cent, or between Rs 65,000 and Rs 80,000 per acre. This is now revised to Rs 1 lakh per acre of cultivable land. Each family will also get one-tenth acre for building a house free of cost, Rs 3,000 for set-ting up temporary accommodation, and a monthly maintenance allowance of Rs 500 for a year from the date of vacating the site. Those keen to relocate away from the proposed township will get an extra Rs 30,000. There will be a rehabilitation colony of one-room-hall-kitchen tenements of 250 sq ft at over Rs 40,000. In four villages where land has to be acquired for the colony, it will pay a compensation of Rs 2.76 lakh plus 42 per cent. Tisco plans to set up a technical training school as well, and pay a compensation of Rs 20,000 to Rs 60,000 for every tree uprooted.

Tisco claims this is the highest compensation for land ever paid in the country. Counters A.K. Patnaik: "The government has undervalued the market rate to help the Tatas. For the four villages, the government has fixed the real estate rate at Rs 23 per sq ft. That yields a compensation payable of Rs 10,10,880 per acre instead of Rs 2,76,000 plus 42 per cent." The GSS also demands Rs 5 lakh per acre for fertile land instead of Rs 1 lakh.

Clearly, economic and emotional issues are ruling the controversy. The Rs 2000-crore port being developed by MMTC is set to alter the face of this idyllic seashore for ever. L&T's 5-mt steel plant is due to come up a few hundred metres off Tisco's. The slag generated by them will beckon cement manufacturers to the area. It will be only a matter of time before Tata Cement, ACC and L&T Cement set up shop. Tisco is also collaborating for a coking oven plant, an oxygen plant and a 300 MW power plant.

Says a state government official, the long-term benefits far outnumber the initial hiccups—in terms of ancillary units, rise in tourist inflow and other service industries. In anticipation, land prices are climbing. A thriving tourist attraction, Gopalpur may soon see a golf course and a sports stadium to cater to the new business executives. But the question to which nobody yet knows the answer is whether the small town is geared to handle the coming industrial boom.