Date:12/12/2005 URL: http://www.thehindubusinessline.com/2005/12/12/stories/2005121200130600.htm

Back Development projects — Kakinada port in troubled waters

Ch. R. S Sarma

The proposal to set up a port-based special economic zone and an oil refinery has sparked anger and controversy in the port town of Kakinada.

KAKINADA port — the second most important in Andhra Pradesh after Visakhapatnam — is caught in a lot of turbulence because of what is being termed an ad hoc approach of the State Government in chalking out the port's development plans.

The proposal to set up a port-based special economic zone (SEZ) including an oil refinery with the assistance of ONGC has stirred the proverbial hornet's nest and, during the past three months, controversy has been raging in the port town in particular, and East Godavari district, in general, on the siting of the two projects (the SEZ and the oil refinery).

It is generally agreed that the two projects will have a crucial bearing on the development of the deepwater port, which, at the moment, has three berths and is being managed by a private consortium, as well as the old anchorage port on which nearly 10,000 fishermen depend for their livelihood.

The State Government has signed a memorandum of understanding with ONGC for setting up the refinery with an annual capacity of 7.5 million tonnes at a cost of Rs 5,500 crore and the SEZ at Rs 3,000 crore in two phases. The two projects, it is estimated, will require roughly 10,000 acres.

The crux of the problem is that if they are to be located in the vicinity of the port, a lot of fertile farmland, under the Pithapuram branch canal (Godavari canal), will have to go and the farmers are understandably agitated about that. They have protested several times against acquisition of fertile farmland for the two projects, which they wanted shifted to upland mandals in the district such as Thondangi where there is no assured irrigation and land prices are lower.

The projects will have to be sited 25-30 km away from Kakinada on the coast, if the farmers' demands are met.

Legislators from the ruling party (the Congress) as well as the Opposition, the Telugu Desam Party, have also expressed their displeasure at "sacrificing fertile farmland" for the two projects.

The Government has not expressed any final or definitive opinion on the technical feasibility of locating the projects away from the port or what is likely to be the impact on the project costs. At a recent meeting, Mr J. Ramamohana Rao, Roads and Buildings Minister, in charge of minor ports in the State, assured farmers that not more than 1,100 acres would be acquired in the vicinity of the port for the projects and the rest would be acquired elsewhere.

Environmentalists are also apprehensive about setting up the refinery near the port because of the damage it could cause marine life.

"The Government should not yield to the pressures of ONGC. It is not desirable to have the refinery and the SEZ so close to the port," says Mr T. Patanjali Sastry of the Centre for Environment, Rajahmundry.

In view of the stiff resistance from farmers, it remains to be seen how the State Government deals with the issue.