Posco gets govt nod with riders
Ending more than five months of uncertainty, the ministry of environment and forests on Monday gave the final clearances for India's biggest foreign direct investment project -South Korean steel maker Posco's 12 million tonnes per annum plant in Orissa - but with stringent conditions.india Updated: Feb 01, 2011 01:54 IST
Ending more than five months of uncertainty, the ministry of environment and forests on Monday gave the final clearances for India's biggest foreign direct investment project -South Korean steel maker Posco's 12 million tonnes per annum plant in Orissa - but with stringent conditions.
The approvals laced with caveats covered a planned steel plant, a captive power plant and a minor port. Together, they involve an investment of R 54,000 crore on current reckoning.
Among the fresh conditions set are restrictions on air emissions, rules on water sustainability, stipulation on the amount of green cover around the plant and a ban on construction at high soil erosion zones. The government also slapped a clause for allocation of 2% of the venture's annual profits towards corporate social responsibility -- a term that usually implies work for the local community.
However, a decision on the diversion of forest land has been set aside and a categorical assurance has been sought from the Orissa government on implementation of the Centre's Forest Rights Act.
Environment minister Jairam Ramesh apparently adopted a softened pro-industry approach as his ministry overturned recommendations from its own committee, which wanted a cancellation and revocation of the clearances that eventually came through. Citing the importance of the project and its potential to usher in development in one of India's poorest regions, Ramesh sought for a distinctive solution.
"Projects like these have considerable economic, technological, and strategic significance for the country," he said in his approval statement. "At the same time, laws on environment and forests must be implemented seriously."
The clearances, though, only mean one headache less for the South Korean firm, which continues to grapple with land acqusition hurdles while also striving for captive mines - an integral part of its India plan. But it does signify light at the end of a regulatory tunnel the company has been traversing for over five years. Posco took the riders with cheers.
"We welcome and accept with humility and gratitude the decision," said G W Sung, managing director, Posco India.