Precarious Project
The Odisha steel plant project of POSCO looked like a perfect example of “jackpot” diplomacy after state visits of former and current Presidents to India and a quick high-level agreement to the project, but all of the effort was in vain.
In July 2008, Lee Myung-bak, former president of Korea, and Manmohan Singh, former prime minister of India, made a specific promise to “try their best to start construction [of an integrated steel plant at the state of Odisha, India] in August.” When former President Lee visited India again in January 2010, former Prime Minister Manmohan Singh reaffirmed his promise to “accelerate the project.” In a joint statement announced by the former President Lee and the former Prime Minister Singh after the summit held in Seoul in March 2012, the sentence “The leading members of two governments reconfirmed the importance of fulfilling the POSCE project in Odisha” was included.
After the administration changed, President Park Geun-hye made a state visit to India in January this year. At the summit with the former Prime Minister Manmohan Singh, she agreed to provide various support for the successful construction of the steel plant in Odisha.
However, due to the current strong opposition of local residents, the state government of Odisha is not likely to grant a permit to deforest. In Odisha, a local civil organization recently designated a national resistance day against POSCO, and residents continue to protest constantly. Regional sentiment against POSCO has been aggravated.
According to the foreign press and industry on Sept. 4, the National Green Tribunal of India, regarding the POSCO’s development of lands and mines for an integrated steel plant, decided, “POSCO is not allowed to deforest without the permission of the state government of Odisha.”
POSCO and the state of Odisha formed an MOU in 2005, which entails US$12 billion of investment, to construct a steel plant. However, actual construction has not started yet due to the controversies of mine exploration rights as well as opposition of environment organizations and local residents.
The Odisha integrated steel plant project of POSCO, which has stagnated for nine years, seemed to regain momentum when President Park visited India.
At the summit, President Park requested the former Prime Minister Manmohan Singh to “provide the 11 million m2 of land and give POSCO the mine exploration rights.” The government explained later on that the project entered the state of settlement thanks to the state visit of President Park to India.
However, different from the explanations of the government, local residents in India and industry professionals do not expect this project to be promoted again this easily. The former Prime Minister Manmohan has already made similar promises three times before, but these were not kept.
Narendra Modi, meanwhile, was elected Prime Minister of India last May. The situation is highly likely to vary from now on.