Posco decision unlikely this month

Posco decision unlikely this month

New Delhi: A panel assessing South Korean firm Posco’s proposed $12 billion steel plant has given the firm 10 days to submit more information, delaying a decision on India’s biggest foreign direct investment, sources said on Tuesday.

The delay means Prime Minister Manmohan Singh, who is monitoring the project as he seeks closer ties with Seoul, will fly to the Group of 20 meeting in South Korea on Wednesday without a firm government commitment to the project.

The verdict of the panel set up by the environment ministry, which is not binding but is required before environment minister Jairam Ramesh makes his final decision, was expected this week.

“The decision is unlikely to happen this month," an environment ministry source told Reuters on condition of anonymity.

Posco has been given 10 days from 9 November to submit the extra information to the panel, a company source told Reuters.

Posco is among several companies that have come under scrutiny from Ramesh, whose tough approach has sparked criticism from businesses and even other members of the government pushing for rapid industrialization.

The long-delayed plant in Orissa has been stalled by protests and environmental reports spearheaded by Ramesh, who has scrapped many big-ticket projects including some by London-listed miner Vedanta Resources Plc.

Singh is keen to forge strong political ties with South Korea, raising the likelihood that the project will eventually be given the go-ahead.

The project faces a unrelated hurdle in the form of a court case filed by a local firm against the state government, contesting its decision to grant a mining concession to the South Koreans. The local company had also bid for the project.

The decision on that case lies with the Supreme Court.