Just days after Prime Minister Manmohan Singh assured South Koreans that his government was keen to move forward with the Posco steel project in Orissa, the National Green Tribunal on Friday suspended the environmental clearance given last year.
It directed the environment and forests ministry to review the clearance, and formulate fresh terms of reference for its environmental appraisal.
The ministry also has to appoint a panel of experts to review the project, after which it will be referred to the environment appraisal committee.
The decision is a setback for the Indian government as well as South Korea, both of whom were keen to get the much-delayed project going. Billed as the largest foreign direct investment project in India (it’s worth $12 billion), there are fears that its problems will make it more difficult for India to attract FDI.
Environmentalists, however, say the Posco project will damage large tracts of forest land and adversely impact the livelihoods of indigenous tribes living in the area.
Environment and forests minister Jayanthi Natarajan said on Friday that “very strict, very transparent procedures and systems had been put in place” before the project got environmental clearance last year.