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Korean steel giant POSCO's plan to build a 12 million-ton-a-year steel plant in northeastern India is not going well. The purchase of land for the plant, which is being conducted for the company by the Orissa State government, has been delayed in the face of opposition from locals. The Korean steel maker also has not yet been granted the right to develop a mine in the region.
POSCO chose Orissa for its Indian facility because it expected to be able to develop a 600 million-ton iron-ore mine there. The steel maker initially planned to complete the purchase of the land last year and break ground this year, but the timetable has been disrupted and future prospects look dim.
POSCO has no problem buying 14.85 million sq.m of the 16.50 million-sq.m site, since the Indian government owns it. But acquiring the remaining 1.65 million sq.m has proved more difficult because it is home to three villages. The steel maker expects the land purchase to be complete before August next year when construction is slated to begin, because two villages are likely to agree to sell their land.
But the problem remains serious because some residents are concerned about more than just money. Leftist activists and civic organizations have joined the fight, fueled by political motives like opposing foreign investment and development and protecting India¡¯s natural resources.
The administrative process in India doesn't move rapidly. Some steps like the designation of the POSCO site as a special economic zone have been completed. But the right to develop the mine hasn't been granted yet since the central government is still reviewing it.
POSCO plans to invest US$12 billion in the region. The plant will employ some 20,000 locals once it is built. According to an assessment by the Orissa State government, the POSCO plant will directly and indirectly provide jobs to some 870,000 Indians.
Forty-six steel makers from around the world have applied to build plants in India, including Arcelor Mittal, the world's largest steel maker. But all of them are in the same boat as POSCO and have fallen victim to a "no-hurry" attitude in India.
(englishnews@chosun.com )
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