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Green nod to Posco, but for a much lower capacity (Jan.)


The Times of India, Delhi, Friday 17th January 2014

NEW DELHI: The much-awaited green nod given to Posco will help it to start its Odisha project in the coming weeks but the fine print of the clearance shows that the South Korean steel giant will not have a smooth ride in setting up its plant as per its 'original' plan.

The order, giving environmental clearance to the company, makes it clear that the final nod of the environment and forests ministry is meant only for the capacity of four million tones per annum (MTPA) integrated iron and steel plant with captive power plant (4x100 mw) as against Posco's original plan of setting up a 12 MTPA steel plant.

The order, signed on January 7, says, "The company shall obtain fresh environmental clearance in case of any change in the scope of the project."

The ministry of environment and forests (MoEF) made this order public on Thursday, the day Prime Minister Manmohan Singh said Posco's steel plant was set to be operational in the coming weeks.

Referring to the green nod given to the project last week, Singh made this announcement after holding talks with visiting South Korean President Park Geun-hye.

Though the company is yet to get licence for the captive source of iron ore (Kandahar mine in Sundargarh district) for the project, the government removed the obstacle by allowing it to make long-term agreement with Odisha Mining Corporation (OMC) and other private mine owners.

The grant of environmental clearance was made possible as the ministry delinked it from the captive port project which required a different set of clearances. Posco is, meanwhile, in the process of signing a memorandum of understanding (MoU) with Gail for supply of liquefied natural gas.

Besides earmarking 5% of the total cost of the project for "enterprise social commitment" based on local needs, Posco under various conditions of the environmental clearance will have to develop a green belt (25% of its area) and keep water and air pollution level under check through various in-house measures.

Although the PM on Thursday said that grant of mining concession for the project was at an advanced stage of processing, the final outcome would depend on the pending forest clearance.

The Posco project, the biggest foreign direct investment to India, was marred in controversies over issues concerning land acquisition and delay in clearances since its announcement over eight years ago. The original plan of the company in 2007 was to set up a 12 MTPA integrated steel plant on 4,004 acres of land.

The MoEF order says, "Presently, Posco's intermediate plan (2012) is to set up 4 MTPA integrated steel plant (Phase-I) with in-built provision for another 4 MTPA (Phase-II) on 2,700 acres of land. Accordingly, the revised layout plan was submitted. However, the original plan of setting up of 12 MTPA steel plant has remained unchanged and intact."

The order makes it clear that the revalidation of the environmental clearance -- which was first granted on July 19, 2007 -- will be valid for a period of five years with effect from July 18, 2012. It means the steel giant has merely left with around three-and-a-half years before getting into the cumbersome process of yet another round of clearances depending on its revised proposal at that time under the 'original' plan.