India reassures South Korean investors, including Posco

HANOI - Ahead of Prime Minister Manmohan Singh’s meeting with the South Korean leadership here, India Thursday sought to reassure potential investors from that country and said issues concerning the $12-billion Posco project will be dealt with “constructively”.

“If it (the Posco issue) comes up during the meetings, we will be able to reassure South Korea their investment should continue,” India’s Commerce Minister Anand Sharma told reporters, as he arrived here accompanying Manmohan Singh on the last leg of a three-nation tour.

“Any issue still to be addressed, will be addressed in a very constructive manner,” Sharma said about delays in environmental clearances to Posco’s integrated steel project, which he said was the largest foreign investment proposal for India.

The Indian prime minister is expected to meet with South Korean President Lee Myung-Bak here Friday on the margins of the India-ASEAN and East Asia summits and Pocso is bound to come up during the discussions, officials said.

The Indian commerce minister also said the Pocso issue had been discussed previously, including the environment clearances that were required for the mega project, but chose to remain non-committal on the future of the project.

“There are issues which have delayed clearances. These are being deeply seen by the government,” he said, adding India has always welcomed South Korean investment and will continue to do so, including projects in steel and automobile manufacturing.

Formally called the Pohang Iron and Steel Co, the South Korea giant had signed a pact with the Orissa government in 2005 to set up the $12 billion mega steel project near the port town of Paradip, some 100 km from Bhubaneswar, by 2016.

The company needed some 4,000 acres, mostly government land, and 2,900 acres of forest area. But thousands have rallied against it saying it will displace betel leaf farmers, eve as the state government says it will bring prosperity and jobs in a backward region.

Seoul has been expressing concern over the delays in according clearances, even as the Expert Appraisal Committee of the environment ministry is expected to meet Nov 6-7 in New Delhi to take a look at various reports made available to it.

Two of the reports are from the four-member Forest Appraisal Committee (FAC) of the ministry, one of which wanted all the green clearances to be taken back, while one member wanted another round of assessment.

Among the two reports submitted to the environment ministry earlier this week, one is by the panel chairman and former environment secretary Meena Gupta and the second by three other members of the panel - Urmila Pingle, Devendra Pandey and V. Suresh.

The ministry set up the panel in July after the Orissa government opposed the report by a previous panel led by National Advisory Council member N.C. Saxena that had recommended stoppage of work, saying the Forest Rights Act had been violated.