Reference Auto

After facing several hurdles, Posco’s fate in India finally didn’t end up the Enron way with the world’s third-largest steelmaker receiving approval for its $12 billion (Rs 50,000 crore) unit in India.

But the Korean major will have to adhere to certain conditions on use of water, among others. It seems a nudge by the Prime Minister’s Office to environment minister Jairam Ramesh did the trick.

The South Korean company plans to build a 12 million metric tonne unit in Orissa in three phases. The Korean company also got green light to divert 1,253 hectares of forest land for the project and a captive port.

Posco’s plant will be India’s first overseas investment in steel and had come to a standstill since 2005 as farmers were constantly agitating against the plant and were unwilling to part with their land.

The plant faced an uncertain future after members of a government committee suggested in October that initial permits given to Posco be quashed owing to flaws in studies done to determine the project’s impact on the habitat.

A Meena Gupta committee report had called for additional conditions to the existing clearances. Posco has decided to plough back a part of its profit for corporate social responsibility (CSR) and the Korean company assured the Orissa people that the concerns of all stakeholders will be taken care of.

In order to avoid a Posco rerun, a proper mechanism for future clearances needs to be put in place and before giving nod to any mega project, the government must first look into and address the concerns of the affected people.

It should then undergo environmental studies in a transparent manner early so that a strategic investor knows whether it is feasible to set up a plant in India, instead of lingering over the issue.

Moreover, all issues, particularly land acquisition, must be resolved hastily. The affected people must be made to understand the benefits they will reap from such projects. In case they are unwilling to part with their land, the government must find an alternative site, preferably that is not arable (barren land) as it is less likely to cause a dispute.

Only after following these procedures, should clearance be given to behemoths like Posco (and Arcelor Mittal, which has lined up mega plans for India) so that projects can be put in the fast lane. A stalemate will only result in a loss of face for the government and investors will shy away from the country.