A Tale Of Two Projects
Tata Steel’s travails in its Titanium project are eerily similar to what Tata Motors faces in Singur
S. KALYANA RAMANATHAN
The Tata Group’s experience with land acquisition is getting worse by the day. First came Singur, where the group’s auto company, Tata Motors, is struggling to construct the plant for its Rs 1-lakh car. Now, it is Tata Steel that has run into rough weather in Tuticorin, Tamil Nadu. It is caught in another controversy over acquisition of land for the Titanium project, its first serious foray into the non-ferrous metals business. For the Tatas, the situations in Singur and Tuticorin are much too similar for comfort.
Ironically, both projects are mired in controversy despite having the blessings of the chief ministers of the both the states. The opposition parties are demanding that the state governments rethink the efficacy of the projects in terms of their social impact.
The opposition in Singur was led by Mamata Banerjee of Trinamool Congress with the extreme left CPI(ML) bringing up the rear whereas the Titanium project has seen established and fringe political powers in Tamil Nadu such as AIADMK, PMK and MDMK, and new faces in the state’s politics such as actors Vijaykanth and Sharath Kumar joining forces. The biggest objection again is about the location of the project, which they allege is coming up on agricultural land and could dislocate people from their ancestral landholdings. Tata Steel executives as well as state officials in Tamil Nadu have rubbished this notion, claiming that less than 4 per cent of the land they plan to acquire is wetland.
“Less than 4 per cent of this is wetland,” says S. Asokan, a veteran geologist and executive-in-charge of the Titanium project. “So where is the question of we mining in agricultural land?” “All you see there is red dry land looking almost like a desert,” says a senior state government official. “Visit the proposed project site for yourself and you will be convinced.”
However, there are subtle differences between Singur and Tuticorin. Land for the first phase of the Titanium project — expected to cover close to 10,500 acres — has been identified, but hasn’t been handed over to the company yet. In Singur, land has already been allocated and construction begun.
Then, the Buddhadeb Bhattacharjee government in West Bengal has not just expressed support for the project, but has also put the state machinery behind the Tatas. The DMK government in Tamil Nadu, however, has taken a cat-on-the-wall stand despite signing a MoU with Tata Steel (through its investment promotion arm TIDCO) in June this year. Chief Minister M. Karunanidhi appointed a committee of ministers and government officials in July, who will visit Tuticorin to see if there is any real resistance at the ground level. “He (Karunanidhi) does not want a Singur or Nandigram kind of situation to erupt in Tamil Nadu,” says a Delhi-based analyst.
View From The Ground
Despite the opposition, large sections of the local community in Tuticorin support the project. S.P. Sudalamuthu, a trader and a supporter of the ruling DMK, says that only a project of this size can pull the local economy out of the ravines. “There is no semblance of any major industrial project here, he says. “It is an opportunity we can’t miss.”
S. Ganapathi, a retired school headmaster, agrees, “The opposition is based on false propaganda.” He believes that people are willing to sell their land as long as they get a fair price. Land owners in the area bear this out. M. Murugan, who owns 300 acres in the area, is willing to part with it. “We have owned this piece of land for three generations,” says P. Kumararaj, a small land owner who is willing to sell off his 14 acres to Tata Steel. “But it is hardly fit for any agricultural use.”
The two projects are not only significant to the Tatas but also to their respective industries. The Rs 1-lakh car, should it be successful, would push global car makers to re-think their efforts in making inroads into markets not taken seriously so far. The Titanium project, on the other hand, could herald a leap for India in the global titanium market. With 461.37 million tonnes of deposits of the mineral ilmenite, which is processed to make titanium, India ranks high among the top five nations along with Australia, China, Norway and South Africa. But the country’s production-to-reserve ratio stands at 0.007 per cent, say Tata Steel officials. The global business for titanium is worth about $12 billion (Rs 48,000 crore) annually.
The Tatas have a backup for Singur in Pantnagar, Uttarakhand, where it has another greenfield plant, at present making the micro truck Tata Ace. But the Titanium project cannot be done elsewhere since other locations such as Kerala, Orissa and Maharashtra are either taken by state PSUs digging for similar minerals or do not have the same quantity of minerals as Tamil Nadu does.
Because a large share of India’s ilmenite deposit is in Tuticorin, it is critical to the Tatas’ titanium plans. While insisting that it’s too early to think of Plan B, Asokan says that the group would not be averse to the idea of looking outside the country if necessary. B. Muthuraman, MD of Tata Steel, put it quite aptly in a recent press conference in Chennai, “Tata Steel is a Rs 1,00,000 crore company (post Corus acquisition) and this Titanium project is a Rs 2,500 crore project. It is for the people of Tamil Nadu to decide.”
S. Asokan has seen two state governments handling Tata Steel’s Titanium project in Tamil Nadu with little progress. The executive-in-charge of the project has spearheaded the company’s ventures in mining for non-ferrous metals since 2000, when it first got its prospecting licences in Tamil Nadu and Andhra Pradesh. He spoke to BW on the issues surrounding the project. Excerpts:
What is the strategic value of the Titanium project for Tata Steel?
We missed the opportunity in base metals such as copper and aluminium. This project should make good that loss. You will find titanium metal in aerospace applications, golf clubs, roofing and knee joints. Due to its better load carrying capacity, it has a huge market in the transport industry, too.
Is there any credibility to the controversy surrounding this project?
None at all. Of the 10,000 acres we plan to acquire, less than 4 per cent is wetland. We are not planning to mine in agricultural land. There is a guidance value for the land, plus solatium and interest charge of 42 per cent. So, the accusation about buying land for a song is also baseless. Not a single dwelling is being removed for this project.
What about the environment and health-related worries?
The mineral is found on the surface. So, we need to scoop the land and not mine deep. After extraction, we will actually leave a better land with greater water retention property than what was initially there. On health, Titanium dioxide is also used in toothpaste. So, where is the health hazard?
We have not reached a stage where we can say we are looking at alternative locations. Yes, the project has reached a critical stage and we need to start acquiring land.