State govts are willing to hand land, forest, water over to industry. But more desperately, people all over India have begun to use all available means to contest the usually coercive intrusion of the State into their lives -Ashutosh Mishra South Korean steel giant POSCO's proposed steel plant hangs in virtual limbo. Popular resistance by the POSCO Pratirodh Sangram Samiti has rendered land acquisition for the Rs 51,000 crore project-hailed as a foreign direct investment coup-quite impossible. While both the company and the state government have announced rehabilitation and resettlement (R&R) measures, on the ground people are getting restive. "They are yet to discuss the matter in detail with us," says Gadkunjanga sarpanch Nakul Sahu. He asserts people will settle for nothing less than permanent jobs for all 3,600 affected families in the three panchayats. As for land, people are demanding Rs 40 lakh per acre for private land and Rs 25 lakh per acre of betel and cashew plantation (grown here on encroached government land in the hinterland of river Jatadhari, where the company proposes a 10 mt per annum capacity captive port in the first phase). Sahu says the annual betel trade here is worth Rs 30 crore; cashew fetches even more. More than 2,000 families are directly engaged; many more benefit indirectly. "Each farmer employs at least three people to take care of the vines. Then there are others who supply bamboo twigs to support the vines or to make a thatched roof over the plantations," explains Jiban Lal Behera, former panchayat samiti member of Noliasahi, who is into betel cultivation. "Betel cultivation is a perennial source of income and there can be no compensation except an equally lucrative and stable alternative source of employment," says Sahu. The sarpanch asserts, the demand for permanent employment as well as the land price people want, are justified. Prices are yet to be negotiated; will POSCO pay? At least people like Sahu or Behera are willing to talk to POSCO. The POSCO Pratirodh Sangram Samiti (PPSS), on the other hand, is dead against. "There is no way POSCO can set up a project. They could not do it for last three years and they will not succeed in future," says PPSS leader Abhay Sahu. He blames the company and the government for violence in the area. Indeed, since last year, clashes have taken a sinister twist, pitting local villagers against each other. The latest clash occurred on June 20 at Gobindpur village, in which PPSS supporter Dula Mandal was killed while five others sustained serious injury. Afterwards, rival groups hurled bombs at each other, and PPSS activists shut up 59 project supporters in a school, releasing them only after police assured action against the culprits. Finally 26 project supporters were arrested. The district administration had to deploy 14 platoons of police force at the project site. The arrest has infuriated people who, allegedly backed by the company, were trying to generate support for the plant. Members of the United Action Committee (UAC), generally sympathetic to the company's cause, have now decided to harden their stand. "It is the government which is delaying the project. While it has completely failed to maintain law and order, it is trying to victimise innocent people. If this continues, no one will support the project," says Tamil Pradhan, a prominent UAC member. The entire area is still on a short fuse. So why isn't POSCO packing up? The Memorandum of Understanding (MOU) signed on June 22, 2005, is heavily loaded in its favour. The POSCO plant, near Paradip, will use state-of-the-art FINEX technology, which eliminates the first step in the steel making process (sintering and coking) and allows the direct use of low-cost ore fines and coal, so bringing down the cost of overall plant operation. The company will also set up a lime calcinating plant, an oxygen plant, a captive power plant, and a steel melting shop with converters, casters and rolling mills. But its greatest incentive lies elsewhere. "Forget the steel plant. POSCO is more interested in the captive port and in iron ore," says former minister Bijay Mohapatra. What will the company gain? For starters, a precedent: the first foreign company to obtain a mining lease in India. More to the purpose, it will be able to source iron ore dirt cheap. The company requires 600 million tonnes of average 62 per cent Fe content iron ore to enable steel-making. While the market price of ore today is about Rs 5,000 per tonne, the company will get it for around Rs 600 (this includes royalty of Rs 27 per tonne; digging and transportation costs). In other words, a cool profit of Rs 26,400 crore over the 30 years the mining lease will initially be granted. The MOU says renewal for another 20 years may be considered if the company applies. The sweetness doesn't end here. Sources say the state's industrial policy itself was jigged to make things easy for POSCO before the MOU was signed. Now, a company is not obliged to make a physical investment of at least 25 per cent in its projects to be eligible for a prospecting licence or mining lease; they can, instead, place orders for equipment worth the same amount to gain eligibility. Just consider POSCO's case in this context: the MOU says recommendation for the mining lease will be made in two phases; the government will take a decision pertaining to the first phase after the company makes an award of 50 per cent of orders for civil and structural contracts, in terms of value, and places 20 per cent of firm orders for machinery, in terms of value. -Down to earth feature