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The delay in revalidation of environment clearance for the Posco steel project has thrown a spanner in the start of work by the company though the Odisha government has completed land acquisition for the first phase of the project over a month back.
The 12 million tonne greenfield steel mill to be built at a cost of $12 billion and billed as the country’s single biggest FDI, is awaiting swift nod from the Union ministry of environment & forests (MoEF).
Though National Green Tribunal (NGT) in its last hearing on August 12 had asked the MoEF to take a decision on revalidation of green clearance for Posco by August 23, sources said, the ministry is yet to submit the necessary documents to NGT with couple of days to go for the deadline.
The MoEF had granted environment clearance (EC) to Posco for a four million tonne per annum (mtpa) steel plant in July 2007 with a five-year validity. Without revalidation of EC, Posco India would not be in a position to start the construction work.
Posco India, in May 2012, had applied for revalidation of the original EC. The expert appraisal committee (EAC) under MoEF, recommended revalidation of the green clearance in its meeting held on June 14, 2012 since there was no change in the original 12 mtpa steel plant plan, to be set up in three phases over 4004 acres of land.
Subsequently, on the basis of an order of NGT, which suspended the final EC of the project in March, 2012, the MoEF had constituted a four-member expert committee led by K Roy Paul to take a fresh look at the issue.
The committee submitted its report to the ministry in October 2012. The EAC then had recommended revalidation of the steel plant EC with certain additional conditions in May 2013. The revalidation is awaiting the signature of Union minister of environment and forest since.
While much of the delay faced by Posco is attributable to the MoEF, the uncertainty over obtaining iron ore deposits had also pushed the company to the back foot. After being locked up in litigations for nearly five years, the company got a breather from the Supreme Court in May this year. The apex court set aside the July 2010 order of the Odisha High Court that had quashed the state government's recommendation for PL (prospecting license) in favour of Posco India and left it to the Centre to take a call on grant of mining lease at Khandadhar in Sundergarh district after considering objections from all stakeholders. “While the Odisha government has done its bit to take forward the project by acquiring required 2700 acres land for the start of first phase work, the dilly dallying by the Centre on issues like environment clearance and mining lease has pushed back the project,” pointed out a senior state official.
However, sources pointed out that the state government, on its part, has also defaulted in signing the tripartite agreement with Posco after expiry of its MoU in June, 2010. Though the company had given its consent to all the fresh conditions in the tripartite agreement, an instrument to replace the MoU, in 2011, the deadline for signing of the pact is getting shifted repeatedly. In a recent statement, the chief secretary has committed that the tripartite agreement with the South Korean company will be signed next month.
The long delays faced by the big ticket investors especially in securing regulatory approvals, has already shaken the investors' confidence. Last month, ArcelorMittal aborted its 12 million steel project in Odisha citing huge delays in land acquisition and law and order issues.
