The following article is based on my own interpretation of the said events. Any material borrowed from published and unpublished sources has been appropriately referenced. I will bear the sole responsibility for anything that is found to have been copied or misappropriated or misrepresented in the following post.
Anuj Goenka, MBA 2015-17, Vinod Gupta School of Management, IIT Kharagpur
Pohang Iron and Steel Company POSCO, largest steel maker of South Korea, a major and dominant player in global steel industry withdraws from India citing the regulatory hurdles.
The company had signed a memorandum of understanding MoU with Orissa Govt. in 2005 to start a 12 MTPA (million tonne per annum) integrated steel plant at an estimated cost of 12 billion USD. The project since its inception had faced several political, environmental and regulatory hurdles. Even after more than 10 years, the requisite amount of land hasn’t been transferred to company.
POSCO Pratirodh Sangram Samiti (PPSS), an outfit of the local people and various civil groups had opposed the land acquisition. Along with dharna, agitation and protests, PPSS adopted the legal route and had filed several cases against the proposed plant.
In a recent hearing at National Green Tribunal NGT, the company had mentioned that it don’t want to pursue its Orissa project any further and whatever the environmental clearances were received by the company can be revoked by tribunal. POSCO was keen to invest in India considering the growth potential offered by country.
The demand for steel was expected to be doubled in India when the rest of the world is facing slump in demand. It tried to set a 6 MTPA steel plant in Karnataka by signing a MoU in 2010 but that plant was also scrapped due to similar issues most notably land acquisition.
This proceeding is a major setback for our country as India continues to lag in the list of business friendly countries. Considering the mammoth size of the project both in terms of size and value, it would had been a major boost for indian economy providing large scale employment (both skilled and semi-skilled), increase tax revenues, alignment with MAKE IN INDIA campaign by the incumbent government.