Now Sajjan Jindal is facing the heat

Moneylife Digital Team

Since she took over as the chief minister of West Bengal, Mamata Banerjee has been giving a tough time to the industrialists who were allotted land by the erstwhile Left Front government for their ‘dream’ projects. The passing of the Singur Land Rehabilitation and Development Act in June has triggered the alarm for industrialists. While the Tatas are battling it out in at the Calcutta High Court, Jindal Steel Works (JSW) is frantically trying to save its greenfield project in Salboni.

Ms Banerjee has hauled up JSW twice, seeking an explanation on the delay in the construction of the 10-million tonnes (MT) plant. Company chief Sajjan Jindal is desperately trying to meet her, but the chief minister has already made her disapproval clear about companies who “are sitting on the land but doing nothing.” JSW, however, claims to be working on the township near the project, but the work hasn’t progressed much since it signed an agreement with the Left Front government in 2007 to set up a steel plant.

Worse, it has failed to get into a lease agreement. The same logic has been used to dispossess Tatas of the Singur land. If the 5,000-acre Salboni project gets scrapped, it will spell further trouble for JSW which has been hit badly after being tainted by the Karnataka Lokayukta report.

Moneylife had reported in December that JSW’s Salboni project, which would comprise a 600MW (megawatt) captive power plant and 1,000MW independent power project, was not likely to make any progress. Massive investments were planned in phases for developing coal mines and a berth at Haldia port. The plant was supposed to create 10,000 jobs, also providing employment for the erstwhile landowners.

Since the agreement in 2007, the project suffered several delays. It got listed as an SEZ (special economic zone) in 2008, allegations of wrongful land acquisitions surfaced, the global recession came about and then the Maoist agitation started. The Salboni plant was Sajjan Jindal’s first project after 13 years since the setting up of the Jindal Vijayanagar Steel plant which had almost bankrupted him. Towards the end of 2010, JSW took over Ispat Industries which delayed the project further.

The ‘big’ industrial projects, like the POSCO plant in Orissa, the Mittal steel plant in Karnataka, and JSW’s Salboni project, have been delayed for long. With environmental norms tightening and local resistance gathering strength, their dreams will take a long time to be realised. And, by then, they may come at a higher price.