POSCO Project Justification Based On Flawed Data
By Mining Zone People's Solidarity Group
20 October, 2010
Orissa Government and POSCO Have Misled the Public on Benefits to the Country, says New International Report
A team of US-based researchers have released a report today claiming that the POSCO project in Orissa is fundamentally flawed and economically unviable, and that the company and the government of Orissa have deliberately misled the public by putting forth false data and numbers. Coming close on the heels of the divided report of the POSCO Enquiry Committee, where the majority of members held that the POSCO project is illegal, the new report, Iron and Steal: The POSCO-India Story , authored by the Mining Zone People's Solidarity Group (MZPSG) , goes a step further. It argues that apart from violations of law and procedure, the POSCO project has been justified based upon deeply flawed numbers with benefits exaggerated and costs purposefully minimized. “This sorcery of flawed numbers has been perpetrated on the country by the Government of Orissa, POSCO and the National Council for Applied Economic Research (NCAER),” said Dr. Girish Agrawal, a California-based lawyer and civil engineer experienced in large infrastructure projects, who is a member of MZPSG and one of the authors of the report.
Iron and Steal is a data-rich and comprehensive report, which has received the endorsement of several renowned intellectuals including Amit Bhaduri (Prof. Emeritus of Economics, JNU), Prashant Bhushan (Advocate, Supreme Court) and Manoranjan Mohanty (Prof. of Political Science, Delhi University). At the press conference today, Shankar Gopalakrishnan, with the Campaign for Survival and Dignity, said that the very reason that the POSCO steel plant was mainly located on forest land was that at the time of the signing of the MoU in 2005, the government could simply hand over the forest land to any company, without giving any thought to people dependent on it. It is only after the Forest Rights Act (FRA) came into effect in 2006 that the rights of forest dwellers have been recognized and this is what makes FRA compliance so hotly contested in the region. Prof Amit Bhaduri pointed out that in the current neoliberal environment, the political leadership is only interested in promoting a climate for investors, even at the cost of all democratic norms and constitutional rights. Commenting on the report, Prof. Mohanty said that Iron &Steal is “the most comprehensive, most persuasive, the best researched report on the POSCO Project.”
While substantiating the various illegalities and procedural irregularities in granting clearances to the project, Iron & Steel suggests that the very reason for the violation of democratic principles and lack of transparency is that the base data on which the project is justified is itself wrong and therefore could not be allowed to come out. Iron &Steel concludes that the POSCO project has 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. The primary findings of the report include:
· the existence of a thriving agrarian economy that the Government of Orissa has refused to acknowledge in Coastal Jagatsinghpur with average annual net yields of over Rs. 40,000 per decimal of land (100 decimals = 1 acre) per year in sharp contrast to the paltry Rs. 11,500 per decimal being offered as one time compensation by the GoO/POSCO,
· gross exaggeration of employment benefits, EIRR and tax revenues by the Orissa, POSCO and NCAER,
· deliberate and systematic procedural violations for environmental and socio-economic impact assessment by both the government of Orissa and POSCO,
· failure to conduct a socio-economic study that would measure the impact of 22,000 people being displaced and more than 50,000 people being affected by the project in coastal Jagatsinghpur and Khandadhar hills.
With the release of Iron and Steal , MZPSG has also announced the launch of its international information campaign on the POSCO India project. Thus far, the POSCO project has only been hyped as India's largest FDI and much has been written about the scale of the project in terms of its captive mines in Khandadhar, and integrated plant and port in coastal Jagatsinghpur. The objective of the report is to focus on the real data around the POSCO project and increase the awareness within the international community about problems with the project.
The Mining Zone People's Solidarity Group is an international research group focused on India, with core interests in the “new economic policy” and development model in India. We do not seek or accept any funding from external sources and all expenses are paid for by the researchers themselves. We have been following the development of several large projects in India, and for the last six months, we have been investigating claims made by the central and state governments about the benefits to the country due to the proposed POSCO integrated steel project and captive port in Orissa.For more details, visit: www.miningzone.org