India to Resolve Stalled South Korean Steelmaker Project

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Aug. 10 – Authorities have committed to help solve the stalled South Korean Posco project due to violations of the Forest Rights Act.

The US$12 billion steel project located in eastern India’s Jagatsinghpur, Orissa is the largest foreign direct investment project made in the country to date. Work on the project was temporarily stopped after an order issued by the Environment Ministry.

“I am acutely conscious of the larger strategic importance of the Posco project,” said Environment Minister Jairam Ramesh. “I am sure some way will found out in accordance with the law of the land.”

Orissa Chief Minister Naveen Patnaik already sent a letter to the Indian prime minister asking for intervention on the major issue.

“When the proposed project has reached a decisive stage, it is unfortunate to ask for halting all activities in the name of review of implementation of the Forest Rights Act,” Patnaik  wrote in his letter. He said that the order to stop work on the Posco project could discourage foreign investment to India.

The Forest Rights Act violations came from reports that Orissa authorities did not account for the rights of people living in the area, slated for the Posco project,  for at least 75 years.

South Korean company, Posco, is the third-largest steelmaker  in the world. The company plans on building a plant in Orissa with the first phase slated to be completed in 2011. The project needs to acquire 1,600 hectares of land, of which 1,173 hectares is considered forested.