Posco project remains in doldrums as FAC won’t lift stay

Already delayed by five years over land acquisition problems, the Rs51,000-crore Posco steel project in Orissa faces the prospect of getting delayed further. The ministry of tribal affairs is now looking at the possibility of whether the South Korean steel project, which involves the largest foreign direct investment (FDI) in India so far, would encroach into land owned by tribals.

The Forest Advisory Committee (FAC) of the union ministry of environment and forests (MoEF) decided this week not to lift the temporary stay order on the forest clearance for Posco's integrated steel project. This implies continued stay on all activities at the Posco site.

After a lengthy hearing with state government officials, the FAC decided to refer the possible violations of the Forest Rights Act to the union ministry of tribal affairs before it reviews the stay on forest clearance again. Tribal displacement is politically sensitive issue in Orissa, after Vedanta Resources' jinxed mining venture in the state's Niyamgiri hills.

Both the Saxena and Meena Gupta Committees, set up by the MoEF to probe into alleged violation of the FRA by Posco, had pointed out that 21 adivasis have been residing in the forest that falls in the project area. Both Posco and the state government strongly deny this.

The Posco steel project is scheduled to produce 12 million tonnes of steel, which is equal to what six PSU plants (Bhilai, Bokaro, Durgapur, Rourkela, Burnpur and Salem) currently produce.

The FAC on Tuesday reviewed both the reports submitted by the Meena Gupta committee, which had given divergent views on the forest right status at the project site.