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Postponement of Utkal till 1998: Is the co-operation cracking up?

Norsk Hydro's controversial bauxite project in Orissa, Utkal Alumina, is constantly facing opposition. Investment and commencement of construction work has been postponed a second time, and this time Hydro blames assignments in other parts of the world and difficulties in finding a new, fourth partner for the project. This gives reason to ask: Has the massive, local opposition made Hydro doubt the basis of their own prestige project? Or is the co-operation with the Indian partners about to cool off?
Artikkelen er mer enn to år gammel. Ting kan ha endret seg.
Norsk Hydro's controversial bauxite project in Orissa, Utkal Alumina, is constantly facing opposition. Investment and commencement of construction work has been postponed a second time, and this time Hydro blames assignments in other parts of the world and difficulties in finding a new, fourth partner for the project. This gives reason to ask: Has the massive, local opposition made Hydro doubt the basis of their own prestige project? Or is the co-operation with the Indian partners about to cool off?


By Tarjei Leer-Salvesen
Norwatch
 
Since the last time NorWatch wrote about the Utkal project, Hydro Aluminium has been visited by Bishop Prokash of Orissa. The bishop met Hydro together with representatives from the church in Norway, and he raised criticism against parts of the company's plans, especially with regard to forced relocation of the indigenous people in the area. During the meeting it was made clear that Hydro will postpone the investment in the Utkal project till 1998, and not start this summer, as they have indicated earlier.

When asked by NorWatch about the reason for the postponement, information manager of Hydro Aluminium, Thomas Knutzen, answers:

- The process of reaching agreements with our partners is moving more slowly than expected. We have also tried to include a fourth partner. This is not yet clarified. Moreover, the entire industry is waiting to see what will happen in Venezuela, where a comprehensive privatization of the aluminium industry is taking place. Potential partners in India are also interested in Venezuela.

He further emphasizes:

- This implies that we will not start with the main construction of the alumina plant yet. But it does not prevent us from initiating some minor projects, such as the construction of a "test residence", which may be a model for rehabilitation later on.

Not very attractive?
It is reasonable to ask why it is difficult to find a fourth partner for the prestige project Utkal Alumina. Why are things moving so slowly? And why are the plans in Venezuela more important for Hydro Aluminium than the Utkal project?

When asked whether the Utkal project is less attractive today than it has been earlier for Hydro or the partners, Knutzen becomes evasive and does not want to answer directly. After several repetitions of the question, he answers:

- We are still working with the project aiming to realize it. However, we do not give a final answer until we make a formal investment decision. We (Hydro) have stated that we aim at doubling our aluminium production by the year 2005. And this involves a considerably increased need for raw material supplies in the form of alumina. This makes Utkal a possibility.

Sources with whom NorWatch has had contact, speculate in whether the collaboration between the partners is deteriorating. If this is the case, and it is also difficult to find a fourth partner, the whole Utkal project is endangered. A gratifying result for the thousands of Adivasians who are threatened by forced movement and environmental devastation.

Hydro in India: The Utkal project
The consortium Utkal Alumina International Limited is a joint venture company between Norsk Hydro and the Indian partners Tata Industries and Indian Aluminium, each with a 33% share. The company is planning an alumina plant in the Rayagada district of Orissa in India, with an adjoining bauxite mine on the mountain plateau Parbat Baphlimali. The project is 100% export oriented and has an investment budget of 1 billion US dollars.

Norwatch Newsletter 8/97

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