Now, JSW plant in Mamata's line of fire

Jindal Steel officials say state government sitting on clearances while CM is busy in public posturing

GN Bureau | July 15, 2014



The JSW steel plant in Salboni, West Midnapore district in West Bengal, which was the only ray of hope in the industry-weary state, is in news again, but for all the wrong reasons. On July 14, while attending a function at a nearby cement factory, chief minister Mamata Banerjee threatened to take the land back from the Jindals unless they started work at the integrated steel-cum-power plant.

Now, it is legally impossible for Mamata to take back the land, as JSW had acquired 294 acres of land directly from villagers and 3,800 acres was given to it by the state government for the construction of the plant.

More importantly, her state government is sitting on some crucial decisions regarding the plant, without which the plant cannot become functional.

So, could it be that Mamata is trying to do another Singur? Her pro-farmer agitation against the Tatas drove Nano to Gujarat in 2008, but ensconced Mamata in the Writers’ Building.

2014, however, is no 2008. And, the CM has nowhere to be catapulted to.

The issue lies with the JSW promising jobs to those whose land it had acquired in 2007. Last year, when Governance Now visited Salboni, there was a growing discontent among the land givers. Having spent the money they got through land sale, most of them are getting weary of waiting for the promised job. Confrontations between villagers and company officials are becoming increasingly ugly. A month ago, a worker of the plant was beaten up by angry villagers, following which company officials at Salboni had to publicly address them to dispel tension.
 
At present, 82 people have been employed by JSW, while 400 others wait for their job.

Mamata has now suggested that the Jindals give the land-giving families Rs 5,000 per month till they are given jobs in the plant. If JSW chairman Sajjan Jindal takes the CM’s threat seriously then he will have to dole out Rs 20 lakh per month.

Jindal was out of the country at the time of writing and could not be reached for his comments, but a senior JSW official told Governance Now: “We sense an ulterior motive of the state government in not giving the clearance. The steel plant was sanctioned as a captive power plant. Now since the entire plan has changed, the plant has to be given the sanction of an independent power plant.”

In 2007, Jindal had signed an agreement with the then Left Front government to set up a 660 MW integrated steel-cum-power plant. The thermal power plant was to supply 60% of its power to the steel plant and the West Bengal state electricity distribution company limited, the state power utility, was to buy the rest of the power from JSW. It was also decided that JSW would buy coal from a private miner, a practice followed in its other plants, such as that in Bellary. But coal linkages were hard to find. And private mining was ticked off after the Coalgate scam came to light. Banks refused to fund a plant that did not have an assured linkage.

Following the constraints, it was decided that JSW would build a standalone thermal power plant. This required certain changes to be made in the power purchase agreement and the agreement with the West Bengal mineral development and trading corporation. “Unfortunately, the state government has not modified any of the agreements yet. Unless they do that, we cannot go ahead,” said the JSW official, who did not want to be identified.

JSW officials say given the state government’s reluctance to clear the project, Mamata has no business giving ultimatums.

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