Open letter to the Tatas

(orissalinks, orissa mining pages

[1] IIT madras award to Mr. Muthuraman

[2] Orissa govt list of leases

[3] Tata Steel: Dhamara 
 

[4] Tata Steel: 2005 press release 

[5] Orissa and Tata Steel 

[6] List of Tata institutes 
 

[7] Tata's cancer hospital plan in Kolkata 

[8] Tata's contribution to Jamshedpur 

[9] Tata's 2005 goodies for Jharkhand

[10] Tata steel and ores  in Keonjhar 

[11] Tata Steel and chromite  Sukinda 

[12] Tata refractories in Belpahar

[13] Tata Sponge iron 

[14] Tata relief council 

[15] Tata's 5 crore to institute of Mathematics and application in BBSR

[16] Tata's courtship of Orissa

[17]  Mining lease document (7 MB file) 

[18] Tata steel and Orissa: an intimate bond or a one sided relationship 

[19] Tata Steel operations in Joda 

 [20] Press release on Vedanta University 

[21]  Hindu on Anil Ambani's proposal

[22] Rediff on Anil Ambani's proposal.

[23] SEZ proposal at Gopalpur 

[24] Hindu: Cost of extraction for captive ore mining


 
 
(Mr. Dilu Panda seems to have overstated his  case. He could not substantiate most of his claims. Nevertheless he did point out somethings that was missed in the open letter. Here is an exchange between us during Sept 14-17 2006, some of which took place in the Agami Orissa Yahoo forum. Oct 22 2006)
 
 
 
 
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To: Mr. Ratan Tata,
Chairman
S/o Mr Nowroji Hormusji Tata Bakhtavar
163, Lower Colaba Road
Mumbai 400 005

Mr B. Muthuraman, Managing Director,
  muthuraman@tatasteel.com

cc: Dr T. Mukherjee, Deputy Managing Director (Steel),
    dmdsteel@lot.tatasteel.com,  
    Chief minister of Orissa (cmo@ori.nic.in)

Subject: From mineral resources to human resources in Orissa
 
Dated: September 2, 2006
 
Dear Mr. Ratan Tata and Mr. B. Muthuraman:

Tata steel (TISCO) has been one of the major lease holders of mines in Orissa. As you know, mineral resources, once used are gone for ever. With that in mind, we in Orissa are now very much concerned, and we want to make sure that our precious and non-renewable mineral resources are converted to human resources. We believe that Tata
Steel has mostly tried to look at Orissa as only a resource for raw materials for use in its other locations. Sure, you have taken actions, at times near lease renewal time, to give Orissa hope of other kind of investments, but then after the lease renewals, your actions have been otherwise. A good example of this is the Gopalpur steel plant. Mr. Muthuraman was given charge of planning for a mega steel plant there in 1995 [1], but after three leases were granted in 1997 and 1998 [2] the Gopalpur steel plant is no longer in cards.

Recently, Tatas are involved in several other ventures in Orissa, some in line with our "human resource developement goal." These include Tata's involvement in Dhamara port and railway line to it [3], establishment of J N Tata educational center in Gopalpur [4], upcoming TCS campus for 1000 professionals [4],  and plans for IndiOne hotels [4] (now called "Ginger"); the last two with a combined investment of Rs 100 crores [4]. Although these are good steps, based on your contributions to other locations (for example, to Mumbai, Jamshedpur and Kolkata), your long history and dependence of mining leases in Orissa, the unbelievably low and slow-changing rates of the leases, and the recent promises by other mine based industry investors to Orissa, your contribution to Orissa has been an insult to Orissa.

Perhaps sensing that your Tata Steel web pages have a special section on "Orissa and Tata Steel" [5]  where you try to convince how Tata Steel does not "look upon Orissa only as a source of raw materials but has woven itself into the fabric of Orissa." We feel that its exactly the opposite. The fact that you do not have such a section with respect to the other states means that it is obvious to people in the other states the benefit they derive from having you, while in case of Orissa many people feel exactly the opposite.  Hence, you have gone out of your way to create a page to convince Orissans. But comparative data say otherwise.

In Mumbai, you have established the Tata Institute of Fundamental Research (TIFR), Tata institute of Social Sciences (TISS), and Tata memorial cancer hospital. [6]

In Kolkata you are investing 92 crores on a cancer hospital similar to the one in Mumbai. [7]

In Jamshedpur, you have a 740 bed Tata main hospital with an annual expenditure of more than 25 crores [8] and in 2000-2001 you spent 120 crores on its civic amenities (out of which 45 crore was offset through revenue collection) [8]. In August 2005 you agreed to fund 50% of a 120 crore scheme of the Jharkhand government which will enable every member of the BPL family to avail of medical care. You promised to annually contribute Rs 25 crore for the next 30 years. You also agreed to contribute 150 crores to set up a modern sports infrastructure in Ranchi. [9]

In comparison, with respect to Orissa, based on the Tata steel web pages, you have medical facilities in Badbil and Joda [10,13], a 30 bed hospital in Sukinda [11] and a 25 bed hospital at Belpahar [12]. The big projects (beyond 1 crore) of your Tata Relief council [14] are Rs 5 crore in 2000 for house construction, Rs 1.6 crore in emergency relief in 1999, Rs 1.15 crore for blankets in 1999, Rs 1 crore for houses in 1996 and also in 1991. Besides that you have given 5 crores towards the Institute of Mathematics and Applications [15]. I hope I am not missing some things, but this is all I could find in your  "Orissa and Tata Steel" page.

From the above one can compare how you have treated Orissa vis-a-vis other states.

Where is the Orissa equivalent of a TIFR or TISS?

Where is the Orissa equivalent of a cancer center that you have in Mumbai and are building in Kolkata?

Where is the Orissa equivalent of a Rs 25 crore/year towards health of BPL that you agreed for Jharkhand?

Where is the Orissa equivalent of the Rs 150 crore for sports
facilities in Ranchi?

Where is the Orissa equivalent of manufacturing industry like the 1
lakh car plant that you are setting up in West Bengal?


This is more frustrating because Tata steel has been mining in Orissa since around 1911. Your website says [16] that prior to 1911 the ruler of Mayurbhanj, Ramchandra Bhanj Deo, "granted the mining lease at very liberal terms." Since then some of the recent leases that Tata Steel has been granted are [2]:

 13.8.70  (Keonjhar,  822 hectares, Iron and Manganeese,                  20yrs),
 27.1.84  (Keonjhar, 2819 hectares, Iron and Manganeese,                 20 yrs),
 15.5.85  (Keonjhar,  464 hectares, Iron and Manganeese,                 20 yrs),
 16.3.85  (Keonjhar,  169 hectares, manganeese, 20yrs),
 6.3.93     (Sundargarh, 372 hectares, Dolomite, 20 yrs),
 18.12.97 (Keonjhar, 671 hectares, iron, 20 yrs),
 18.5.98   (Jajpur,    406 hectares, Chromite, 15 yrs) and
 7.7.98     (Keonjhar,   16.3 hectares, manganeese, 20 yrs).

The lease rates are often set very low by the Indian government and are not quite at par with the market and they change ever so slowly. For example, recently, the
Orissa government stated [17] that during a short period of time when the lease rate went up from Rs 24.5 to Rs 27.5 there was a five fold increase (on an average) in iron ore price. In [25] it is mentioned that "
the cost of extraction for captive mining for SAIL and Tata Steel is between Rs 250 and 325 per tonne, while the market price (iron ore) is around Rs 2,000 per tonne."

With respect to the importance of the mines in Orissa to Tata Steel, your website [16] mentions how the initial lease granted by Bhanj Deo met the iron ore requirements of your Jamshedpur works and that the major source of your iron ore at present is located in Joda [18], and that you acquired the lease at Joda in 1925. It also says that your company has had lease for chromite mines in the Sukinda region since prior to 1953 [11] and you have a Ferro-alloys plant in Joda
since 1958 to supply manganese alloys to Jamshedpur [19].

Being dependent on Orissa so heavily for close to 100 years, having been granted mining lease at liberal and  slow-changing terms, when one compares what you have given back to Orissa vis-a-vis Jamshedpur, Mumbai or Kolkata, it is an insult that you say [16] that "the initial romance between Tata Steel and Orissa is now a
happy "marriage" solemnised by Tata Steel's continued development of  Orissa."

Now let us compare your contributions to Orissa with what some of the others have brought to Orissa's table recently.

Anil Agarwal of Vedanta has promised to establish a Rs. 15000 crore Vedanta University in Orissa with a personal endowment of $1 billion. [20]

Anil Ambani has promised to develop a 12,000 MW thermal power plant in Orissa with an investment of Rs. 50,000 crore and another Rs. 10,000 investment towards transmission and evacuation of power. With that he brought forward ideas of setting up a Health City in Bhubaneswar with an investment of Rs. 500 crore, and an institute of higher learning in information technology (IT) with an investment of Rs. 1000 crores. [21,22]

We do agree that your recent involvement in Dhamara port and railway lines to it, a TCS center for 1000, and IndiOne (now called "Ginger") hotels are good investments for Orissa. However when one compares them to your contributions to Jamshedpur/Jharkhand, Mumbai and Kolkata/West Bengal, your contribution to Orissa is way behind and insulting.

Nevertheless we have great respect for the house of TATAs for their contribution to India as a whole and we hope that you will sincerely reevaluate your give-n-take relationship with Orissa, compare it with your relationship with other states and cities, compare it with other industrialist's recent courtship offers to Orissa that I mentioned above, and make urgent amendments.  Following are some big and small ticket suggestions that if pursued together by the TATAs
will help revive their image among many in Orissa. (As a guideline to what you should spend in total on these you may look at Anil Ambani's offers as a lower limit with respect your future planned investments in Kalinganagar and other places. In addition you should consider what you have taken from Orissa in the past and what you should have given back to Orissa in the past.) We suggest that you do at least 80% of the following:

(1) You should establish a medical and nursing college and hospital in Keonjhar district where most of the mines you have leased lie. For the next 20 years the college should have 50% free seats for students from the districts where you have mined in the past.

(2) You should establish 10 institutes like the one you established in Gopalpur distributed across ten industrial districts of Orissa.

(3) Besides your planned 1000 employee TCS center in Bhubaneswar, you should develop 500 employee TCS operations in Rourkela and Berhampur each.

(4) You should contribute half the cost of the Khurda Rd-Balangir railway line or the Talcher-Bimlagarh railway line so that at least one of those lines can be finished by the Indian Railway on priority basis.

(5) You should further fund the Institute of Math and Application and develop it as a full fledged Tata Institute of Science and Technology aiming to make it at par to IISc Bangalore (which your predecessors established) in 15 years.

(6) You should go beyond the R & R requirements of the Orissa government and the Indian government for people displaced due to your operations by allocating each child already born to a displaced family a sum of Rs 300 per month for tuition and Rs 2000 per year for uniform, books, and supplies until they are 18, so that they can study in
whatever school their parents/guardians choose for them.

(7) With respect to the land you have accumulated with Orissa government's help in Gopalpur, you should either use it in a tax generating enterprize within a year (such as making quick progress on the SEZ proposal that was cleared in 2001 [23]) or handover the land back to IDCO (at the cost you received it) so that Orissa can use it for other purposes. (Note that your action of holding the land and not doing anything "constructive" with it has vitiated the atmosphere in Orissa in regards to land accumulation for other projects.)

(8) You should contribute an amount similar to your contribution to Jharkhand for funding the health for BPL families in the backward districts of Orissa.

sincerely,

 Chitta Baral
 Arizona State University
 USA
 chitta@gmail.com