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March 24, 2007 12:31 IST
Frustrated over delays in getting approvals for its Rs 52,000 crore (Rs 520 billion) steel project, South Korean steel giant Posco is reviewing its investment plans in India while looking at other options in South East Asia.
The company has told the central and the Orissa government that "if matters were not sorted out within the next two-three months, it could re-consider its investment plans in the country," official sources said.
The Korean giant has sought categorical assurance from the government on various issues for its 12 million tonne project. Posco officials have asked the Navin Patnaik government to spell out its stand on the project "as it cannot afford to wait for an indefinite period," the sources said.
Posco India officials, when contacted, declined to comment. Meanwhile, Posco's chief Executive Officer Ku Taek Lee met Commerce and Industry Minister Kamal Nath on Friday, apparently to discuss the progress of the project.
Posco, which had signed an MoU with Orissa government in June 2005, is facing stiff resistance from locals at its project site in Jagatsinghpur district. The protesters allege the company wanted to acquire the land at a throwaway price.
The company was also actively toying with the idea of shifting to Vietnam, which has a huge potential market and an investment-friendly climate, a government official said.
"They are committed to the project, but are worried that nothing is happening on the ground," the official said. "Many investors are watching the progress of Posco's project in India and are saying it is not a safe destination for investment," he added.
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