Orissa's industrialisation plan suffered another crushing setback on Monday when a committee set up by the environment ministry asked the government to scrap the environment clearance granted to South Korean steel giant Posco and called for a fresh impact assessment.
But the majority opinion in the committee was softened by a note of leniency from its head, and that left a crack open for review of the $12 billion (Rs 53,000 crore) project, unlike in the case of the Vedanta group, whose bauxite project linked to its aluminium refinery expansion was unambiguously rejected by the ministry on environmental grounds two months ago.
Both Posco, whose project involves the largest foreign direct investment proposed in India, and the state government kept a guarded silence. But the task is clearly uphill for Chief Minister Naveen Patnaik, who industrialisation plan has faced protests from activist and tribal groups.
On Monday, Ramesh received two reports from the same panel on alleged violations of two clearances by his ministry - an environmental clearance granted in 2007 and a forest law clearance in 2009. Nearly a third of the 4,000-acre plant site involves forest villages the future of whose inhabitants is in question.
While a majority view from sociologist Urmila Pingle, former forest officer Devendra Pandey and human rights activist V Suresh wanted Posco's clearances scrapped on the ground that it "suppressed facts" and did not comply with environmental laws, the other by former environment secretary Meena Gupta - who headed the panel - said environment clearance should continue.
But both reports called for a new environment impact assessment (EIA) for the steel project.