Three years after the Mou was signed by the Orissa government and Korean multinational POSCO for setting up an iron ore extraction plant in Jagatsinghpura, Orissa, POSCO has announced it will substantially increase compensation for land acquired from villagers.

For three years on end, people have been waging a determined struggle against the POSCO project. Earlier this month, on April 1, 2008 there was a standoff between the company and the villagers. POSCO planned a ground breaking ceremony, hundreds of people from villages in the area planned a huge rally despite the large police presence. POSCO decided to cancel the ceremony – peoples rally went on. Meanwhile, Orissa government and various politicians have also been carrying on trying to create a "pro POSCO" "movement" on the lines of what the CPI(M) government in West Bengal tried to do in Singur and Nandigram.

What is the reason for POSCO's apparent "change of heart" on relief and rehabilitation? One reason is the struggle of the people, not only of that area, but of the whole state and whole country against land grabbing by multinationals. The whole country is debating on what logic state can deprive the people of livelihood, using hated colonial laws. The whole country is debating how over 60 years of independence, people have been short-changed in the name of relief and rehabilitation..

Equally importantly, POSCO's project has got delayed. Studies reveal that POSCO will be raking in unimaginable profits once it starts extracting iron ore. If a minuscule portion of that is given to the agitating people as compensation, and the company gets the name of being a 'socially responsible company" in the same manner that the Tatas have assiduously worked their image in Jharkhand and Orissa, then what could be better?

The POSCO project is a 12 million tonne steel plant, spread over 4000 acres in Jagatsinghpura, together with vast tracts of tribal land for mining of iron ore. There will also be a captive port for export of iron ore and steel.

Studies show that iron ore is being handed over to POSCO by the people of Orissa at less than 0.5% of the open market price of iron ore. Figures show that for extracting 600 million tonnes of iron ore, the company will give Orissa government Rs. 1620 crores. The current market value of this ore is Rs. 288,000 crores. Since the Mou was signed in 2005, Iron ore prices have gone up every year by 20%, 19% and 70% respectively.

The indirect costs of this effort to the people of Orissa add up even further. Thousands of acres of land and millions of gallons of water given almost free to the company, coal at give away prices and the economic venture framed within an Special Economic Zone (SEZ) providing tax benefits to the company.

For the last three years, POSCO, backed by the state government as well as the Centre, has made consistent, systematic, yet unsuccessful attempts to 'take over' this highly fertile and ecologically fragile coastal area for its projects. For the last four months, 18 battalions of police have been deployed around these villages, occupying government school buildings. The administration had also barred the entry of essential supplies into these villages and restricted free movement of people in the region. But the unrelenting resistance to the project in the face of coercion, cajoling and various other pressure tactics proves that the stakes are higher for the affected people.

POSCO gains hundreds of thousands of crores and the people of Orissa get little from the deal. Even 1000 crores in displacement compensation will be insignificant for the company and the scale of profits it will make. This is why it is talking of increasing compensation, to get the project kick-started by any means!