The South Korean government seems to wash its hands of South Korean steelmaker Posco’s project to build a plant in Odisha, an eastern Indian state on the Bay of Bengal, as the project has been getting nowhere due to strong opposition from local residents.
South Korean ambassador to India Cho Hyun have recently told Indian reporters that "It is now for the company (Posco) to decide whether it wants to set up the project or not." His remark hinted that the South Korea government was doing an about-face on the Korean steel behemoth’s project in the region.
Posco’s Odisha project, billed as the largest foreign direct investment (FDI) in India, was a sensitive issue in Korea-India economic cooperation. South Korea President Park Geun-hye even called on her Indian counterpart several times to support Posco’s project in the state.
Posco had inked an MoU with the state government on June 22, 2005 to set up a 12 million tonne per annum steel plant near the port town of Paradip in Jagatsinghpur district.
A total of 13 trillion won was supposed to be ploughed into the project. However, as the project was mired in delays due to lawsuits over mining rights, problems surrounding environmental clearance and procuring land and opposition from residents, there has been no progress on the site.
On April 9, The Times of India ran an article titled “South Korea hints at dropping Posco plant.” According to the article, Cho Hyun told Indian reporters that "South Korea has many other things to offer to the state, not just Posco. We should not focus only on Posco."
Asked if the South Korean government would no longer push the project, Cho Hyun gave a vague reply, saying the Korean government would honor the decision taken by the company based on its commercial considerations, according to The Times of India. The Times of India quoted him as saying that “It is now for the company (Posco) to decide whether it wants to set up the project or not."
The Times of India reported that “Cho Hyun dropped hints that even his government, which was earlier pushing the project at the government-to-government level, has lost interest in it.”
President Park Geun-hye used to seize every opportunity to throw her weight behind Posco’s Odisha project.
