f the more than two dozen major steel industry projects in India tracked by the Conway Data New Plant Database since the beginning of 2005, nearly half involve investments of US$1 billion or more. Nearly half of those in turn are inching forward in the state of Orissa, where they are confronting an unprecedented series of obstacles on their path to perhaps unprecedented opportunity in this nation of 1 billion people.
   Regulation remains one of those obstacles. The country's government transparency record is not stellar, but improving. The 2006 Transparency International Corruption Perceptions Index ranked India in a tie for No. 70 out of 163 countries, on a par with Mexico, China and Brazil. The World Bank's Doing Business Index rates India at No. 134 out of 175 countries in ease of doing business, though it ranks high in the area of investor protection, and is improving in such categories as "starting a business" and "getting credit."
   According to an early July presentation by Shardul Shroff, managing partner of Amarchand & Mangaldas & Suresh A. Shroff & Co., called "Need for regulatory reforms in India to support growth opportunities in metal & mining sector," despite reforms gradually allowing more foreign investors instituted since the early 1990s, "FDI inflows in metallurgical industries comprised of only 1.89 percent of the total FDI inflows for the period August 1991 to March 2007."
   Dr. Hans-Jörn Weddige is the Brussels-based head of Market Development and Sustainability for the 40-year-old International Iron and Steel Institute, whose members represent between 60 and 70 percent of the world's steel production. He also served as project director for the IISI's "India 2020" report, published internally as a service to the organization's members, which include half a dozen major Indian steel companies, such as JSW, Tata, SAIL and RINL. While IISI can take no position on recommendations to governments or do any lobbying, Weddige does offer some of his personal viewpoints. Asked if there are regulatory roadblocks, he says he would not characterize it as such.
   "There might be administrative problems," he says. "The system in place at first glance is not that different from that of the U.S. or European Union, but they might not always be equipped well enough to administer it."
   In response to that concern as well as lagging transport development to support such mega-projects, the Indian government has set up a group led by the steel ministry that is working to ensure the removal of both infrastructure and legal bottlenecks. But that doesn't mean the pace will quicken overnight.
   "It's not as quick as it would be in China or in some other countries," says Weddige. "I'm not sure that's a bad thing. It might mean India would be more likely not to fall into the trap of suddenly having overcapacity, but rather have a more sustainable approach to development."
   Weddige describes just what exactly makes up the steel industry in such an enormous and populated country:
   "Steel production in India is being done currently by hundreds if not thousands of steel plants which are so small you can't imagine them – almost backyard forges. Big companies account for only half of India's steel production. The small-scale sector is very unregulated in India, which has led to certain problems."    Public relations may be the industry's most urgent need when it comes to opening new plants or expanding existing ones. The title of another July presentation to the Associated Chambers of Commerce of India conference by one steel company executive says it all: "Sprinting for Joy & Cherishing People: An endeavour to share the other side of JSW."
   The subtitle of the talk delivered by Tuhin Mukherjee, executive director of JSW Steel Limited, spoke more plainly: "Corporate social responsibility as a risk mitigation tool." Among the statements in the presentation was the following:
   "That social acceptance to a project is critical for the success of the project is evident from some of the recent incidents where social unrest resulted in one SEZ [special economic zone] project being dropped from the locality, while another industrial project [was] considerably delayed. In summary, we may say that securing social acceptance to the project is already a battle half won."
   Weddige says the approach is no different from what companies like U.S. Steel and others have been doing worldwide for decades. He says Tata, being the oldest, has "an extremely good track record" in steel and its many other industries, from cars to tea to titanium dioxide, which it wants to make at a just-announced plant that could receive an investment as high as $550 million in the Tuticorin district of automotive industry powerhouse state Tamil Nadu. The company is seeking 12,000 acres of land, and says it will employ up to 1,000 people directly at the operation.
   The firm's JV with Australia's Bluescope Steel is building a steel building plant near the IT Park at Hinjewadi, Pune. The company is also moving forward on a $611-million new port at Dhamra in Orissa, the same state where local officials in Gopalpur are trying to convince the company to move an automotive plant from West Bengal, to land the company purchased years ago for proposed steel production but hasn't done anything with yet.
   Mittal is proposing two plants – one in Orissa and one in Jharkand – valued at over $18 billion combined. South Korea's Posco also is pursuing its own new port to connect to a new $12-billion steel complex, also in Orissa. Weddige says Posco's project, though "taking much longer than they initially wanted to," appears to be on track, despite local resistance.
   Such resistance to steel and other large industrial projects – which has in some cases led to bloodshed, according to published reports – is similar to land use conflicts in Brazil and other territories, says Weddige. It does not originate from a common anti-steel sentiment in the population, but appears to be fueled by a few interested parties only, he says.
   "It's legally a problem of the Indian state governments, which get the land and sell or lease it to the steel companies," he says. "It's a question of how much it's worth to the people living on that land. My understanding is there are relatively clear rules, but again, the efficiency seems to be lacking."
   Which steel projects will go forward and which will falter? Much hangs on the chicken-and-egg question of industrial infrastructure, says Weddige, as the big rail and port projects that would use a lot of steel wait on the steel plants to produce, and vice versa. The country's focus on services industries will also have to give way in some part to a focus on supporting infrastructure and manufacturing, he says.
   "In many places, there is no railway link, no port – or if there are such things, they don't allow sufficient capacity," he explains. "This is the crunch point – infrastructure in itself will lead to an enormous surge in demand."    India forecasts its infrastructure investments, prodded by the private sector, will approach 9 percent of the country's GDP by 2012. That's nearly as large a fraction as its current budget deficit, which hovers at around 10 percent of GDP. By comparison, infrastructure-savvy China's total investment is at about 7 percent of its GDP, which is triple that of India.
   Among the infrastructure developments and issues highlighted in a recent Ernst & Young report:
   • Following some success in luring private investment in ports and highways, the government has done the same with large power plant projects, awarding the first two "Ultra Mega Power Projects" of 4,000 MW each to developers in December 2006.
   • A $5-billion dedicated rail line from Delhi is in the works.
   • "The government welcomes (indeed needs) private investment through public/private partnerships, allowing up to 100 percent foreign equity in projects, and hopes for an injection of $320 billion in private capital during the next five years."
   • A $500-million container terminal is under construction in Kochi, a southwestern city.
   • The country has fewer than 4,000 miles (6,437 km.) of Interstate-caliber highways. A $12-billion national ring road, connecting India's major cities, nears completion. (Another ring road around Hyderabad, backed by the increasingly popular public-private partnership approach, now is moving forward.)
   • Airport expansions and updates are under way in Mumbai, Delhi, Bengalooru and Hyderabad.