POSCO project was cleared on flawed data, says research group


New Delhi : An international research group Wednesday questioned the very need of the South Korean steel major POSCO’s $12 billion project in Orissa, saying it was cleared by the state and the centre on the basis of deeply flawed numbers that exaggerated benefits and minimised costs purposefully.

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The Mining Zone Peoples’ Solidarity Group (MZPSG) said the project was based on flawed figures of employment generation and tax revenue presented by POSCO on the basis of which the Orissa government cleared it in 2005 and the central government accepted it blindly.

In a report, “Iron and Steel: The POSCO Indian Story”, MZPSG said that POSCO had claimed that the project would generate 872,000 jobs, which was a plain lie as the maximum direct jobs a project of this capacity could generate in the next 5-10 years period is about 7,000 jobs, less than one percent of the current Orissa unemployment rate.

The report comes two days after an environment ministry team gave a divided opinion on the project, with a majority of team members seeking cancellation of environment clearance to the project.

“Besides the violation of Forest Rights Act and non-compliance with the environment and coastal zone regulation, there has been occlusion of transparency as the base data on which the project is justified is itself wrong and it should not be allowed,” said Girish Agrawal, a California-based lawyer, and one of the two MZPSG researchers.

The tax reveue claims advanced by the Orissa government based on the National Council for Applied Economic Research (NCAER) data are clearly fraudulent and these had been blindly accepted.

“The mining profits that POSCO will make are nothing short of a free bonanza. Apart from the exclusive mining rights in Khandadhar district for the extraction of ore at cheap royalty rates for its Indian steel plant, the state government has promised an additional 400 million tonnes of iron ore for POSCO’s South Korean steel plant,” said Shalini Gera, who was also part of the MZPSG team that visited Orissa.

The report concluded that the POSCO project had been allowed to proceed without a basic socio-economic study, a complete blockade on discussion of the current local economy, wild exaggerations of benefits and a deliberate overlooking of infrastructural and ecological costs.

“Had there been so many benefits offered by the POSCO project, the local people would have happily accepted it rather than protesting it. The project would displace 22,000 people and more than 50,000 people will be affected by the project in coastal Jagatsinghpur and Khandadhar hills,” she added.

POSCO had signed a deal with the Orissa government in 2005 to set up the project near the port town of Paradip, some 100 km from state capital Bhubaneswar, by 2016.

POSCO requires about 4,004 acres, mostly government land, for the project. Of the land earmarked, 2,900 acres is forest land.

Thousands of villagers have been protesting against the project, saying it will displace them from their homeland and ruin their betel leaf farms.

POSCO and the state government, however, maintain that the project will bring prosperity and employment to the impoverished region.