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Blessed by nature, cursed by politicians, Orissa lags behind in industrialisation

Bibhuti Mishra in Bhubaneswar

Industrialists are lukewarm to the idea of investing in Orissa. They would rather prefer the neighbouring Andhra Pradesh whose chief minister, N Chandrababu Naidu, has the reputation of being industry-friendly and techno-savvy. In contrast, Orissa Chief Minister Giridhar Gamang is considered regressive. Gamang's policies are considered populist, not pragmatic.

After National Aluminium Corporation or Nalco proved a success, late Orissa stalwart and former chief minister Biju Patnaik wanted to establish alumina plants in the undivided Koraput district.

The private sector evinced interest. Indian Aluminium Limited or Indal set up Utkal Aluminium Corporation in collaboration with other domestic and foreign parties in Kashipur. L&T too evinced interest in setting up a venture. When J B Patnaik became the CM in 1995, the Aditya Birla group was roped in and Aditya Aluminium Company took shape.

This raised grand visions of all around development of the region. For AAC is a 10,000 tonne capacity aluminium plant that generated direct jobs for 5,000 people and indirect employment to 10,000 people.

But dreams are fading under the tenure of Gamang. Utkal Aluminium was to be set up in Kashipur and Aditya Aluminium in Kansariguda. Both the sites are in Laxmipur, Gamang's constituency. Gamang assured the people that no plant would be set up if the people do not want it.

Incidentally, the tribals of the area had been opposing the plants fearing displacement although they have been assured employment and rehabilitation. Some non-government organisations were on their side too. But with the CM coming out openly in their support, the anti-industry campaign has got a boost and it has sent wrong signals to industrialists.

Orissa is on the verge of losing Rs 150 billion investment if both those aluminium plants fail to materialise. The Aditya Birla group had signed an MoU with the state government in March 1997 and its proposed plant at Kansarigudo was to use the bauxite from the mines in Kodingamala.

Although the company has spent Rs 240 million so far including Rs 25 million for taking the land lease, the company, it is learnt from reliable sources, has decided not to put in any more investment. For the project appears to have been shelved in the wake of the CM's stand.

The techno-economic feasability report presented by Kaiser (Asia) and Bachtel (Australia) felt that the project might not be very profitable from the shareholders' point of view. But the real reasons for the Aditya group to shelve it was the lack of interest from the state government under Gamang, industry analysts said.

Orissa's loss has become Uttar Pradesh's gain and the Aditya group has decided to pump in Rs 15 billion for its flagship company Hindalco at Renukut for its expansion. When asked about the possible resurrection of the AAC, its president S K Tomotia said, "Our group chairman feels that if such snags come up and the project gets delayed inordinately, it would mean massive losses. So the project has been stalled. However, we would like to be sure of the state government's stand."

When Tomotia had met Gamang before the byelection on June 21, the CM had deferred the discussion to a later day. However, it is learnt that the chief minister's attitude towards not only AAC but also Utkal Aluminium is anything but inspiring.

Utkal Aluminium at a revised cost of Rs 45 billion was to have a production capacity of 1 million tonnes annually. It is learnt the Indal chairman who had come to Orissa recently, failed to get an audience with Gamang. The Indal group is apparently considering shelving the project because of non-cooperation. The group has already spent Rs 600 million on the project.

A top official of Orissa's industry department said, "Orissa is blessed by nature but cursed by politicians." This just about sums up why the state with abundant mineral resources lags behind in industrialistion.

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