Are our MoUs essentially a hand written handshake and nothing more?
Friday, January 06, 2012
Are our MoUs essentially a hand written handshake and nothing more?
By Devasis Sarangi
Our State Odisha has been, if I can say, a front runner is signing MoUs several are on the verge of expiring and requesting for renewal. We have come up with mindboggling numbers and figures and any one viewing would essentially feel elated that development is sure to accrue to the State and it would be the best performing one in less than a decade from now.A little scrutiny and you would be forced to think “Are our MoUs essentially a hand written handshake and nothing more”?

The government seems to be proactive in promoting relationships but not business; maybe they have not been guided properly by experts into the technicalities to foresee, happenings they thought it is unlikely to occur as there was no history of such eventualities earlier. The assumption by the government probably was that as the activity develops a more detailed agreement will any way be prepared so why concentrate so deeply now.

They don’t appear to be any guarantee that all other things being equal, a proposal submitted by the corporation, have demonstrated benefits to the region through social positive impacts and not just economic impacts. Neither the corporation nor the government demonstrated to the public in clear terms the short term, medium term and long term benefit and only highlighted the long term if any….

The problem appears to be that public assets (mineral resources, land, forest, water and so on) have been allowed to be traded without transparency or a process of public auctioning to be more precise. This would necessarily antagonize people and make them believe that the government is allowing the corporations to take away the resources by only paying a royalty which many times can be less than 2 per cent of the value of resources.

The corporations on their part do not seem to have done much to provide benefits before the execution of the proposed project by providing for without them asking both the voluntarily and involuntarily displaced people except when the court seem to have forced its hand and then it is too late. Had they spent more here, than the Liaoning cost, read essential benefits to Politicians; maybe they would not be in such state of affairs.

This essentially means that one gets to only see the illusion of the benefit and does not actually agree to what the corporations want them to believe. This causes delay and discontent and a wonderful tool for others like oppositions, read politicians, to highlight the mismatch that keep turning tables from the corporation to the people and vice versa and essentially benefit none.

Another problem seems that these large corporations seem to have thought that by recruiting a local Yes man who essentially has no management powers but only liaison powers they would be able to execute the project without actually partnering with a local firm or expertise.

They also never setup a dedicated large project team with a large brick and mortar presence This deprives them the advantage to have an in-depth understanding of the local conditions and gaining the trust of the local people that they are committed to and capable of serving the benefits of the local people without much negative social impact and their model is that of a long term sustainable development.

Lets take the example of Vedanta Group. Had it initially, just set up a medical hospital with subsidised rates for the local people for treatment, knowing fully well that local people in Puri do not have any speciality hospital for treatment? The corporation on its part had spent huge sums of money in getting the best design done by the best architect and there was no reason for suspecting its intensions had they learnt to do their homework well and spent some portion on the people at the same time to not allow the opposition to score brownie points.

It would have shown them the socio-economic benefits that accrue. Maybe that should have been the first clause in the MoU from the government side and something even the corporation should have done voluntarily before.

Also, it may have been a good idea to request the huge land in phases and government having such a clause to release land in phases. This way the Government would have created the land bank but parted in phases and not be struck with the project taking off as the opposition would cry hoarse. Also this could have been offered by a transparent bidding process with clear commitments from both sides. The government on its ambition to create Mega lands up creating none. The vision being intact maybe the implementation should have been phased in a manner implementable.

Lets take POSCO Group. It would have done well to start a small offshore set up of its Ivy League technology institute, POSTECH, near the project site to convince the local people that jobs will be created not taken away as well as primary education centres with economic subsidy. The setup would have not cost them too much and not required too much land as well but would have demonstrated the socio benefits for the people to see and the opposition to sit quiet. This could have been part of the clause of MoU from the Government side or done voluntarily by the corporation if they wanted to demonstrate their commitment.

Our State government on its part also never created large land banks like in Gujarat before sitting on the table for these written handshakes. The irony is that the Principal Secretary Industries and Mines Department of Gujarat whom we sit and admire so much; is an Odia himself. So it is not a problem with the gene system as several want us to believe. Will the Government and Corporations learn at least now before it is too late?
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