Sep. 8, 2010 - ArcelorMittal, the world's top steelmaker, can start building its $6.4 billion steel plant in Karnataka by December after local authorities compensate displaced farmers, a senior government official said on Wednesday.
"First we have to pay the compensation to the farmers. That process has begun. Then we will take over the land," V.P. Baligar, principal secretary of commerce and industry in the Karnataka government told Reuters from Bangalore.
Farmers and tribesmen, reluctant to surrender their land, have opposed several projects including Vedanta Resources' plans to mine bauxite, an expressway that will connect New Delhi with Agra and POSCO's planned steel plant in eastern India.
Baligar said he expects farmers to accept the compensation as it offered them a price they would not easily get from crop cultivation.
"We have prior experience in acquiring land for industrialisation. The only hesitation may come on the extent of the compensation. We are giving them much more than they now get," the official said.
Baligar said that most of the land was currently used for growing one rain-fed crop in a year such as barley.
"Paying compensation will take about a month's time. Hope so ... by November-December, at least land will be handed over to them (ArcelorMittal) and they can start the civil works."
Baligar said ArcelorMittal has deposited 3.5 billion rupees ($75 million) with the state which was being used for payments to the farmers at the rate of 800,000 rupees to 16,00,000 rupees for one acre.
In an interview in August, Karnataka's chief minister B.S. Yeddyurappa told Reuters the land acquisition was almost complete for ArcelorMittal's 6-million-tonne steel plant in Bellary district and other facilities and approvals would be expedited.
Baligar said about 1,000 farmers would be getting the compensation and he expected most of them to sell out without resistance.
He said the state government was also helping several other steel companies including POSCO to acquire land totalling to 40,000 acres.
"POSCO has already deposited the money.... They are sending one more technical team to finalise the land location," he said. POSCO plans to spend 300 billion rupees for a 6-million-tonne steel plant in the state.
The state government was keen to push new projects and was convincing people to accept it, the official said.
"We are saying industrialise and flourish."
