India has an assurance that Posco remains committed to its investment in India, though it is currently engaged with the state of Karnataka that is courting it with an offer of iron ore mining rights as well as land.
India's ambassador to the Republic of Korea Skand R. Tayal said on Thursday that the company is fully committed to its $ 12- billion steel project and the Indian legal requirements for the rehabilitation and resettlement of people affected by the project.
"The Korean government and the company display understanding that procedures have to be met and that the government of India and the state of Orissa are keen on the project," Tayal said.
Separately, sources told BT that Prime Minister Manmohan Singh was recently assured that Posco will not pull out because of India's promise of mining rights to 600 million tonnes of iron ore, something that is not going to be easy for the company to find elsewhere.
However, if Karnataka is able to woo Posco the project could slip out of Orissa's hands. " Bangalore and Posco are courting each other," sources told BT. The proposed project, which entails the largest- ever commitment for foreign direct investment (FDI) in India, has been hanging fire for about five years.
The South Korea giant and the Orissa government had agreed in 2005 on a steel project near the port town of Paradip by 2016. The state government had agreed to make available 4,000 acres of land for the project.
Posco would also need 2,900 acres of forest area, which has run into trouble over the possible displacement of betel leaf farmers. An assessment committee on the Posco project headed by former environment secretary Meena Gupta delivered a split report in October.
Three of its members raised pointed out lapses and illegalities in the Environment Impact Assessment (EIA) process.