By Jane Han
Staff Reporter
At an executive board meeting in New Delhi October last year, POSCO CEO Lee Ku-taek confirmed that the company's India Project would break ground no later than April 1, 2008. But two months later in Orissa, crude bombs, arson and open fighting broke out again. It was just one of the many violent backlashes that have been dogging the steel giant's ambitious $12 billion project for the past two years.
Over time, anti-POSCO riots became so common that the local media reported ``it could be a matter of time before the crisis takes a deadly turn.''
If this is such a job-churning project that is set to be India's biggest-ever foreign direct investment (FDI), why are so many ready to face bullets?
Observers say that the local residents ― mostly betel leaf farmers ― are not only sentimentally attached to the region that has been home to them for generations, but they also see POSCO as an exploiter of a sustainable agrarian resource.
``However big the FDI may have been, one industry cannot be set up at the cost of thousands of other industries,'' Abhay Sahoo, who heads the anti-POSCO movement, told a local newspaper.
According to an agreement signed in June 2005 with the Orissa state government, POSCO will build a 3 million ton capacity steel plant between 2007 and 2010, and will expand the final production volume to 12 million tons, ultimately boosting the company's global competitiveness.
Also under the deal, minerals-rich Orissa will grant POSCO mining lease rights for 30 years that will ensure a supply of 600 million tons of iron ore ― the main ingredient for steel _ along with permission to export another 300 million tons ― all of which seems a huge amount for the locals, compared to what they're getting in return.
POSCO claims it will directly employ 18,000 people and indirectly hire around 50 times more, and offer a competitive rehabilitation package to them. But residents say the world's fourth largest steel maker must do better than that if it means business.
And if not, farmers say they won't budge from giving up an inch of land.
POSCO needs 4,000 acres in Orissa for its first-ever overseas integrated steelworks and it will not begin construction until it has at least 3,000 acres. Currently, it has about a quarter of what it needs.
Despite repeated negotiation attempts made by company officials and the Orissa government, which fully backs POSCO, little or no progress has been made. However, the first positive sign came last week when a sizeable group of people living in the proposed plant site said they are willing to give up their land for a ``lucrative'' package.
A member of a joint committee comprising representatives from the POSCO-affected areas told a local daily, The Times of India, that the villagers were now ready for talks with the company and the government on the land acquisition issue.
Because the project has hit so many snags along the way, some are skeptical about how much progress this will add, but POSCO seems to be optimistic.
``The India Project is rocky, but the one who finishes at the end will reap the rewards,'' said Lee.
``There are a growing number of instances where land has become the bottleneck in the development of the project,'' said Subir Gokarn, chief economist at Crisil, the Indian unit of Standard & Poor's. ``When people come to India, they are aware of all these issues and everybody works out a fallback scenario and needs to decide whether it's worth it or not.''
POSCO sees that it's worth it and steel guru Lee hopes that the India Project will bear fruit on April 1, the same day as the company's 40th anniversary.