Green tribunal scraps Posco's $12bn Odisha project

New Delhi, March 30 (IANS) The National Green Tribunal (NGT) Friday suspended environment clearance to South Korean steel major Posco's $12 billion project in Odisha, the biggest foreign direct investment in the country.

Hearing the petition of Prafulla Samantray from the state, the bench comprising Justice C.V. Ramulu and Devendra Kumar Agarwal, asked the environment ministry to review the environment clearance afresh accorded to it in January last year.

"The environment clearance granted on Jan 31, 2011 to the project shall remain suspended till such review and appraisal is done by the ministry," the order stated.

The order comes days after Prime Minister Manmohan Singh's assurance to South Korea that the government was taking "proactive" steps to improve the business climate and move forward with the Posco mega steel plant project in the state.

According to tribunal, the memorandum of understanding between the state government and Posco states that the project is for production of 12 million tonnes of steel per annum (MTPA) but the environment impact assessment (EIA) report has been prepared only for 4 MTPA steel production in the first phase.

"The EIA should assess it for the full capacity right from the beginning," it said.

Asking the ministry to attach specific conditions which the company would have to follow in a defined timeline, it also directed for setting up a special committee to monitor compliance to the environment clearance.

The bench also directed that Posco should generate its own source of water instead of utilising the drinking water meant for Cuttack city.

Posco requires 4,004 acres, mostly government land, for its project. Of the land earmarked, 2,900 acres is forest land.

Thousands of villagers have been opposing the project, saying it will displace them from their homelands and ruin their betel leaf farms.

Posco and the state government, however, maintain the project will bring prosperity and employment to the impoverished region.