S Korea asks India to sort out Posco tangle

India on Tuesday drew flak from South Korea over the continued delay in implementing the $12-billion Posco steel project in Odisha, prompting New Delhi to assure Seoul that it would review the matter.

The delay in Posco’s Odisha project figured in a meeting between Sharma and South Korean Minister of Knowledge Economy Sukwoo Hong, on the sidelines of the Global Partnership Summit organised by the Confederation of Indian Industry in Agra.

Sources said if Prime Minister Manmohan Singh agrees, the issue is likely to be taken up in the first meeting of the newly-constituted Cabinet Committee on Investment on January 31.

CCI has been set up to sort out issues pertaining to mega infrastructure projects costing above Rs 1,000 crore (Rs 10 billion).

“We have been concerned about the delays and will be conducting a review.

“Prime Minister himself has been monitoring this project," an official statement quoted Commerce and Industry Minister Anand Sharma as saying to Hong.

According to sources, the Korean side categorically asked India to sort out the hurdles in way of the Posco project, before discussing any other issues.

The fate of Posco project with a capacity of 12 million tonnes per annum (mtpa) steel in Odisha's Jagatsinghpur has been hanging in the balance since June 2005.

Land for the project has not yet been fully acquired due to opposition from the local people.

According to Posco India's website, the project has now been divided into three phases of 4 mtpa each. “Phase I is expected to conclude in 2016-17.

Phase II will be completed three years after completion of Phase I and Phase III will be commissioned within three years after Phase II,” the website says.

The first phase is estimated to cost $3.7 billion.

For the 12-mtpa steel plant, Posco required 4,004 acres.

However, after Odisha government expressed its inability to transfer the entire land in one go last year, the company decided to scale down the plant size to 8 mtpa initially and now needs about 2,700 acres.

The Odisha government is believed to have acquired 2,100 acres so far for the project.

Posco is yet to get green clearance for the project. On March 30, 2012, the National Green Tribunal had suspended the green clearance granted on January 31, 2011, on not seeking clearance for the entire project.

Etihad delegation

A delegation of Abu Dhabi-based carrier Etihad Airways, which is expected to buy stake in Jet Airways, will meet Sharma on Thursday.

The meeting comes in the backdrop of Jet Airways stating earlier this month that it was in talks with Etihad regarding a potential investment by it in the Naresh Goyal-owned carrier.

Sources said the issue figured in a meeting that Sharma had with UAE Foreign Trade Minister Sheikha Lubna bint Khalid al Qasimi.

According to unconfirmed reports, Jet is likely to sell 24 per cent of its equity to the major Gulf carrier.

Recently, Jet Airways informed the Bombay Stock Exchange that Jet and Etihad were in discussion regarding a potential investment by the latter in the former.

If the deal happens, it could be the first investment by a foreign carrier in an Indian airline after the liberalisation of the foreign direct investment policy in aviation.

Clarity for Tesco Sharma indicated greater clarity would be offered to British retailer Tesco on sourcing requirements.

When asked about his meeting with Tesco chief Sir Richard Broadbent in Davos, who asked greater clarity of the FDI policy, Sharma said when policies are made they would naturally require greater clarity.

“In relation to sourcing, we will see if a particular investment is coming in one state, whether sourcing has to be done from that state only.”