By Vivek Pattanayak in Bhubaneswar, May 17, 2017 : It was the summer of 2005 when there was a big headline in the Montreal daily, “The Gazette” announcing that the world’s biggest integrated steel plant would be set-up by the South Korean steel behemoth Posco in Orissa (now called Odisha). Everybody who knew me in that city showered me with congratulations.

On my return to India after a brief sojourn there, within a few days of this announcement, at Delhi airport I saw a most disheartening news report that there was massive opposition to the project from political parties who were in opposition, ambiguity among some members of the ruling coalition and also an anti-steel plant agitation from the civil society organizations.

When I reached Bhubaneswar, the local media was full of news about how this project would cause great hardship to the local people of Paradip area by way of displacement, land acquisition of valuable agricultural land including betel leaf cultivation and environmental depredation and in addition the precious iron ore resources would be permanently depleted.

Finally, it was mentioned that the viability of Paradip port would be in danger as POSCO would have its own facilities. There was also allegation that foreign companies should not be allowed to exploit our ancestral wealth as they bring no prosperity to the local people.

During this period when I had the occasion to meet Mr Naveen Patnaik, the Chief Minister in his office in another context, I strongly urged that he should not allow this project to fail in spite of all the adverse reaction in the media, political circles and civil society as an opportunity once lost might not come back for decades for variety of reasons.

I gave the example how in the eighties the British offer to set up the second steel plant went out of our hand when after near finalization of the project site some thought of relocating it from Paradip to Daitari on the ground of difficulties of acquisition of land in the heavily populated area and Paradip being cyclone prone site the steel plant would not be safe. When the cost overrun due to this change of location made the project unviable the British company promptly withdrew the offer. In response to my plea, Patnaik was quite optimistic about the outcome of this project. He seemed very positive.

In March/April 2017 there was news report that Posco had finally decided to drop the project after nearly twelve years of mammoth and herculean effort facing tough local opposition, tortuous land acquisition process, constant political confrontation from opposition parties most of the time, occasionally from coalition partner and also from within the ruling phalanx of the governing regime, ambiguity with regard to allocation of dedicated mine, environmental rigmarole, and finally as the last straw on the camel’s back the change of policy of allocation of mines and regulations of mining which came about at all-India level following the observations of the national auditor and judicial pronouncements.

Recently a highly respected and a very senior civil servant of yesteryears, an octogenarian veteran who had served both the central government and state government of Odisha with great dedication and dignity – Sovan Kanungo, asked me to make an assessment and air my views publicly through an article indicating what went wrong with the project so that this could be a lesson for the future. Why could it not be successful? What was lacking?

Was it lack of political will? Or was it lack of bureaucratic commitment? Or was it lack of national enthusiasm? Was it due to apathy of the people of the State? Was it lack of dedication of all the stake-holders?

I have had exchange of views with few senior officials, eminent retirees, political stalwarts, successful businessmen, seasoned journalists, known civil society activists and reputed members of academia. They included a former chief secretary of the time, a former chief secretary of the nineties, a former development commissioner and a former ambassador.

What surprised me most was that one of them said that POSCO itself did not want to have it. Lack of political will was attributed by two officials of the past. One was very candid in saying that the local people are contented by what is already there. “They believe in status quo and no change”. One put the blame on political party in power not being able to mobilize public opinion in support of the project.

One stated that local leadership did not have courage to steam roll the opposition while some found fault with central political leadership past and present for playing politics and dilly dallying clearances. Some blamed local bureaucracy and others the central bureaucracy. Incidentally, some genuinely felt that the project was anti-people and against the tribal communities and questioned growth model of economy or “trickle-down theory”.

The life span of this project idea was spread over the period under stewardship of one chief minister of the state and under leadership of two prime ministers of the country. One prime minister was an eminent economist known for having led reform process of India as a finance minister and other was politician with an experience of running a developed state for three full terms and more. One was in office for good nine years, part having been washed by media hype of “scams” and the other for three years of very high popular rating with full media support for his development agenda .

During this long twelve year period, the President of South Korea personally raised the issue by coming to India at the highest levels more than once apart from innumerable contacts and communications at other levels. During this period any number of people from India and Odisha visited Korea. POSCO launched unprecedented public relationship exercise to motivate all types of stakeholders including journalists and opinion-makers of the state and the country to support the project.

What could have been a greater show- piece of success under “Make in India” much publicized flagship programme of the most popular and powerful prime minister of India in the recent times than POSCO? What could have demonstrated more successfully about ease of doing business in India than implementing the POSCO project?

Why POSCO decided to invest and waited for so long? They came to India more precisely because of rich iron ore mines to manufacture steel when the world was experiencing robust economic growth -China hitting double digit growth and India almost reaching that figure, emerging market more precisely BRICS was under the cusp of magnificent economic achievements and even Africa demonstrating spectacular growth. It coincided with Mittal taking over Arcelor, and Tata acquiring Corus. Incidentally, Jindal made heroic effort to enter far way Bolivia.

L N Mittal also went to Jharkhand and also came to Orissa. Mittal withdrew from both Jharkhand and Orissa. Jindal left Bolivia. Problem of acquisition of mines and land, and opposition from the indigenous people with political parties and non-government organizations getting into the fray, and media no less active typified all the scenarios. Tata has not done well in UK. How will Mittal fare, only time will show?

The period also witnessed the world’s worst financial crisis since Great Depression. In spite of all these developments POSCO did not quit. Was it an example of Asian patience or hope against all hopes? Uncertainty of getting mines with new policy was perhaps the defining moment.

If between 2005 and 2008 land acquisition could have been completed, mines allocated and environmental clearance given, the project would have perhaps come with certain amount of certainty. This was not possible due to local opposition to land acquisition and delay in allocation of mine and environmental clearance which entailed processing in the central and state governments and judicial intervention. It coincided with Kalinganagar firing, opposition to allocation of mines to Vedanta, land allocation to its university, and highly publicized national scams. This dampened national zeal and enthusiasm.

FILE PHOTO

Time is the essence of a project. Viability depends upon assured and uninterrupted supply of raw materials at a price affordable to the project and a market which can give adequate and attractive return to the promoters. Delay can upset the apple cart.

India of 21st century, a constitutional democracy with independent judiciary, autonomous national auditor, vibrant free media and active civil society and diverse political thoughts and equally heterogeneous political process is vastly different from what was during the period of Nehru and Indira Gandhi. Success of a programme or a project depends upon national consensus of institutions and stake-holders which should be able to sense when it can be a slip between the cup and the lip.