Tata panel wants PMO team to speed up mega projects, Govt says no

The upswing in global commodity prices prompted multinational steel giants ArcelorMittal and Posco to tap resource-rich India by proposing mega investments. While Posco promised to invest Rs 52,000 crore in a 12-million tonne integrated steel plant in Orissa’s Jagatsinghpur district in June 2005, ArcelorMittal followed it with a proposal to spend Rs 80,000 crore to build a plant each in Orissa and Jharkhand. But both Mittal and Posco are struggling to secure various clearances — statutory and legal — triggering Tata’s concerns that these projects may never materialise.

According to senior government officials, the three hurdles faced by ArcelorMittal and Posco relate to mining concessions, land acquisition and environmental clearances. Justifying the rejection of the Commission’s proposal, they said land acquisition was a state subject. As far as mining concessions were concerned, they were statutory in nature and the Centre cannot give any directions, they said.

Moreover, the PMO cannot be involved or seen sitting along with ArcelorMittal and Posco executives to push their projects, especially when there is an inter-ministerial group that is monitoring the process. “We also have a Foreign Investment Implementation Authority under the department of industrial policy and promotion to follow the progress in such projects,” the official said.

The officials said that the PMO can only ensure that the states — Orissa and Jharkhand — where the projects are proposed to be built had the capacity to absorb such huge investments. “The PMO monitored all infrastructure — road and ports — projects and helped create an enabling environment in the two states,” another official said.

Domestic and foreign steel players have signed 193 memoranda of understanding with states for setting up new units with a total planned capacity of around 243 million tonnes and a total proposed investment of over Rs 5,14,000 crore.