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Monday, 20 Jan 2014
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Environment Ministry on project clearance spree


The Indian Ministry of Environment and Forests (MoEF) has gone on a project clearance spree in a bid to revive investor sentiment. Ever since Petroleum Minster, M Veerappa Moily took the helm of the Environment Ministry in December 2013, over 65 projects have been reportedly cleared.


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To start with, the environment ministry granted environmental clearance to Posco's Rs 12,000 crore steel plant Phase-I, coming up at Paradip in Orissa. The eight million tpa integrated steel project has been stuck since 2005 due to environment clearances and land acquisition issues.


The much-delayed integrated steel project is India’s single largest foreign direct investment project so far. Phase-I of the project consists of a four million tonne steel plant along with a 4 x 100 MW captive power plant and a captive port. As per the ministry, the two parts of the Posco project - the steel plant and the port - have been delinked and only the steel plant and the captive power plant have been granted approval as of now. Environmental clearance for the port project is still pending.


The company is hopeful that Phase-I of the project might be commissioned in 2018 while Phase-II will be completed three years after completion of Phase-I. As of Jan 2014, 1,703 acre of land had been handed over to Posco India by the Orissa government and another 1,000 acre is ready to be given. The company requires 2,700 acre of land to start construction.


MoEF has also granted forest clearance to NHPC’s 800 MW (4 x 200 MW) Tawang-II hydel power. The Rs 3,622 crore project is proposed on the Tawangchu river in Arunachal Pradesh.


Environmental clearance was granted to the 4 x 700 MW light water reactor-based nuclear power project at Gorakhpur in Haryana to be set up by Nuclear Power Corporation of India (NPCIL), which would see an investment of Rs 23,502 crore. The project will be implemented in four phases; each phase comprising 700 MW capacity.


MoEF has accorded environmental and Coastal Regulation Zone (CRZ) clearance to the Rs 5,187 crore deepwater container transhipment port proposed to be set up at Vizhinjam in Kerala. The project envisages development of the existing harbour at Vizhinjam into a major commercial port, through PPP mode, on DBFOT basis.


Other mega projects that have secured environmental clearances are the 2 x 800 MW Ennore SEZ supercritical thermal power project in Tamil Nadu; Chennai Petroleum's 16.7 km crude oil pipeline project in Tamil Nadu; and Hinduja National Power's 2 x 520 MW coal-based power project in Visakhapatnam.


Additionally, the Ministry of Environment and Forests has reportedly given its approval to 23 projects of Coal India (CIL) after the intervention of the Cabinet Committee on Investment (CCI). As on December 30, 2013, MoEF has granted environment clearances to 16 proposals; Stage-II forest clearance to two projects; and stage-I forest clearance to five proposals.


The ministry is also considering granting Stage-I (in-principle) forest clearance to the iron ore mining project linked to ArcelorMittal's USD 12 billion steel plant in Jharkhand. A clearance to the ore mining project in Karampada forest reserve will pave the way for ArcelorMittal’s venture into prospecting of iron ore in the mine.


ArcelorMittal has already applied for environment clearance for the iron ore mining project, and preparation of Environment Impact Assessment (EIA) is underway.


In addition, coal mining projects such as the Rohne open-cast mine in Jharkhand and the expansion of the Gevra open-cast project in Chhattisgarh are likely to secure environment clearances in the coming days.


Policy Initiatives


In addition to clearing long stuck projects, the environment ministry is also undertaking several policy initiatives to make the process of granting environment and forest clearances, fair and transparent.


MoEF has initiated the process to set up an environment regulator to carry out an independent, objective and transparent appraisal; approve projects for environmental clearance; and monitor the implementation of the conditions laid down for such clearances. As directed by the Supreme Court, the ministry has to put the regulator in place by 3 March, 2014.


In an effort to speed up implementation of ultra-mega power projects, the environment ministry has decided that the go-ahead for power stations of such projects will no longer be linked to clearance of their captive coal blocks. Thus, forest and environment clearances of the coal block have been de-linked from that of the power station. Earlier, till the time the coal block obtained Stage-I forest clearance; the power plant could not apply for environmental approvals.


The environment ministry has also come out with a draft policy on guidelines and timelines for state governments to monitor and inspect industrial and commercial projects that have been given the go-ahead to clear and use forest lands.


Several mega projects have been delayed since the last few fiscals, resulting in cost overruns. Although these steps were much awaited, it is still a long way before the huge lined-up investments in the steel, mining and power are listed.

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Quote of the week:


M. Veerappa Moily, Minister of Environment and Forest  

“My number one priority is that the process should be smooth here and delivery should be perfect. I would like to see that whatever pending matters are there in this ministry-yes or no-I will do it within a month. I will mark the day, and (you can) come on the last day and ask me if there are any files pending. I will say no.”

M. Veerappa Moily, Minister of Environment and Forest


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