Posted on 06/04/2015 8:32:33 AM PDT by Zhang Fei
Bhubaneswar: South Korean steel giant Posco has waited patiently for its 12 million tonne per annum (MTPA) port-based steel plant near Paradip in Odisha to take off for nearly a decade. But with the Centre ruling out any out of turn allocation of iron ore mines to the company and the Odisha government giving the impression of washing its hands of the project, the steel major’s patience appears to be wearing thin.
Nothing proves this exasperation better than the ugly war of words between Posco and Industrial Infrastructure Development Corporation of Odisha (IDCO), the land acquisition arm of the state government. In a recent letter to IDCO, the Korean company has asked for an item-wise expenditure receipt for the Rs 30.34 crore it had paid towards land acquisition.
Posco followed it up with another letter asking for a refund of Rs 11.21 crore out of the Rs 13. 52 crore it had paid towards acquisition of 438 acres of private land for the project, which was never acquired due to stiff opposition from the people of Dhinkia village, the epicentre of the movement against Posco.
(Excerpt) Read more at firstpost.com ...
Not a lot of sympathy for Posco.
They’re paying money to the government to forcibly take people’s land and hand it over to them. And the people getting the shaft are resisting.
I, too, would be upset if (say) China Holdings Ltd. paid the state of Texas a billion dollars to exercise imminent domain on my land and my neighbors’ land and hand it to the foreigners.
There was a good article in Financial Times not long ago about the abuse of government takings in third world countries, with emphasis on India. The system is rife with corruption, as you might imagine. And who decides what it’s worth?
imminent <= eminent
They paid $4.5m per acre of land for rural land in India. In comparison, land in the Galveston area costs less than $10K an acre. And this is for land near a bustling port at the center of a major oil and gas boom vs farmland in India. Something doesn't smell right. The interest alone on 10-Year Treasury Notes on $4.5m is $100K per year. I can't believe that Indian farmland yields $100K per year per acre. Heck, if US farmland, which is acknowledged to be generally superior to much of the world's stock, yielded that much, it wouldn't be selling for thousands of dollars per acre.
>> They paid $4.5m per acre of land for rural land in India.
Like I said... corruption is endemic in the process. I doubt Mom and Pop Indiancitizen would see anywhere near that amount.
Wonder why Posco goes through the Indian gov’t instead of negotiating for land on the open market?
And if you say “because the government won’t let ‘em” then I’ll reply (again) that corruption is endemic in this whole process.
Re Chinese eminent domain, the system is generally pretty generous, which is why you get these isolated instances where large demonstrations occur - these are the exceptional cases in which the tenants got gypped. And almost like clockwork, the officials at the center of the dispute get fired and in many cases, prosecuted. Through Chinese contacts, I’ve heard that a lot of land is basically leased out to manufacturers, with the rents being distributed to the former tenants. It’s when the officials involved try to grab the lion’s share of the proceeds that the tenants get riled up. Note that in many cases, the tenants literally have only squatters’ rights to the land - much of it was confiscated by the Communist Party from rich landowners (many of whom were executed, along with their families, with the cooperation or even assistance of the tenants). Since the rightful owners of the land are in many cases dead, thanks to the Party and the tenants who helped kill the landlords, it’s probably not unreasonable that the tenants don’t get all the rewards that a rightful owner would from land development.
Care to back up that figure with a link? Because only land in Mumbai and Delhi is worth that much. In rural Orissa.that would be the land cost for say, 100-200 acres, not 1 acre.
You say that Union Carbide got taken for a ride. Actualy UC killed thousands in Bhopal, India when Methyl Iso-Cyante escaped from poorly maintained tanks. Enron foolishly bribed officials so they could charge double to triple the prevailing rate for electic power. Obviously, they had to shut down.
Where do you get your data on India from - Chinese sources?
Actually, the Indian government's laws and regulations prevented Union Carbide from directly supervising the plant it had paid for. The plant was an all-Indian operation not subject to foreign corporate control. Nonetheless, the disaster resulted in a complete write-off of the plant for Union Carbide and a payment of $500m to the victims. All for an incident for which Union Carbide had no management responsibility and was basically a passive investor not very different from someone who buys stock in a corporation, thanks to Indian rules.
Re Enron - it's a case study in Indian corruption and malfeasance, but Indians will always have special reasons for why the foreigner is once again to blame. And this too-clever-by-half obscurantism is precisely why India's per capita growth rate will continue to lag not only its ex-communist neighbor to the northeast (China), but the up-and-coming ex-communist nations to its east and southeast (Vietnam, Cambodia and Laos). All this while Indians continue to tug away at the Gordian knot that will one day unravel the ways in which the foreigner is to blame for all of India's problems.
Sorry, but you are wrong (deliberate misiformation?). The plant was majority controlled by Union Carbide and run by its appointed Indian staff. All they could cry was 'sabotage'. See the wiki entry :
http://en.wikipedia.org/wiki/Bhopal_disaster
And you have nothing to say about your bogus figure of land cost for the POSCO plant - it seems they owe only 10 mil or so US$ for 1700 acres, a pathetically low figure which seems to be at the root of their problems.
“Sorry, but you are wrong (deliberate misiformation?). The plant was majority controlled by Union Carbide and run by its appointed Indian staff. All they could cry was ‘sabotage’. See the wiki entry :
http://en.wikipedia.org/wiki/Bhopal_disaster “
Wikipedia isn’t really a reliable source of politically-contentious topics - people with the most time on their hands tend to win out re what is posted. The Wall Street Journal had a long article detailing exactly how Indian laws prevented Union Carbide from running the plant.
“And you have nothing to say about your bogus figure of land cost for the POSCO plant - it seems they owe only 10 mil or so US$ for 1700 acres, a pathetically low figure which seems to be at the root of their problems.”
Mea culpa. Crores are a mystery to me. I used an online converter and assumed that the period stood for thousands, the way Europeans do it. It’s roughly $7m rather than $7b. At $4.5K an acre rather than $4.5m, it seems about right for rural land near Galveston, but perhaps a little low for India. Regardless, Posco had a plant up and going in a matter of years in Indonesia (2x India’s nominal per capita GDP, and climbing). The Indian project has finally bitten the dust.
I’d give you a link to the WSJ article, but it’s over a decade old, and I can’t find it from just a casual search of the Journal’s archives. It provided damning detail of the ways in which Union Carbide was prevented at every turn from playing an active role in the management of the plant. As a former leftist who had thought of Union Carbide as the anti-Christ from the material I read about Bhopal at the time of the incident, it opened my eyes. I began to understand why India has lagged the ex-Communist nations of the world and will continue to lag them in economic growth, until serious philosophical changes occur. I’m not holding my breath.
India will always lag any authoritarian regime.
We don’t see tanks rolling in our streets except on Republic day.
Authoritarianism isn't the reason for the ex-communist regimes' faster growth rates. Cuba's authoritarian. So's North Korea. Plenty of authoritarian regimes with slower growth rates than India. In fact, the world is full of slow-growing authoritarian countries. Indonesia and the Philippines don't have authoritarian regimes. They are corrupt cesspools just like India. But they have faster growth rates.
The real reason they are growing faster is simply that they not only welcome foreign investment - they facilitate it. Even when they require some degree of local shareholdings in order to line the pockets of local politicians and moguls, they allow foreigners to run their companies. This provides an incentive for foreigners to invest there, and that foreign investment has multiplier effects, as suppliers, local and foreign, set up shop to service the foreign company. India's solipsistic obscurantism and continued wallowing in the glories of its halcyon days prevents it from participating in this growth, not democracy.
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