South Korean steel major Posco has overcome the first hurdle in getting the forest diversion proposal approved from the central government for its proposed 12-million ton mega steel project near Paradeep in Orissa.

The company has obtained the stage-I forest clearance from the Union Ministry of Environment and Forests. Subject to fulfilment of the stage-I conditions in terms of mitigation measures, steps will be taken for the next stage of approval, said official sources.

The Rs 52,000-crore project, billed as the biggest foreign direct investment project in the country, requires 4,004 acres for its greenfield steel plant in the Jagatsinghpur district of Orissa.

Of the 4,004 acres, forest land is about 2,958.79 acres, for which the state government had sent the FDP to the ministry. The ministry has given the stage-I clearance now.

Following the submission of the central empowered committee's report on the FDP, the Supreme Court heard the matter on August 8 and passed the order, allowing the diversion of the forest land for the project.

According to the apex court's order, the state's steel and mines department constituted a four-member committee under the chairmanship of S K Patnaik on October 30. The committee will examine the steps to be taken as mitigation measures to protect the area from cyclone and other natural calamities as a large number of trees will be cut in the coastal region. 

The committee will suggest various mitigation measures such as compensatory afforestation and assess the net present value of the forests to be destroyed. It will give its suggestions within two months, sources added.

The state's Chief Secretary Ajit Kumar Tripathy reviewed the progress on Monday.

Talking to the media, G W Sung, director, Posco India, said the state government has assured the company to expedite the processes associated with the approval of the FDP by the Union government. Similarly, it assured to convene the meeting of the Rehabilitation and Periphery Development Advisory Committee within 15 days to expedite the settlement of rehabilitation issues, Sung added.

On the progress of land acquisition for the project, which is facing a roadblock due to local agitation, Sung said the company intends to start work on the 414.19 acres of the non-forest government land in the first stage.

Of this, 313.19 acres have already been sanctioned to Posco by the collector of Jagatsinghpur in October 2007 and the same is now pending for transfer to the company for clarification on premium amount by the revenue and disaster management department of the state government.

Similarly, another stretch of 10 acres in Badagabapur has been sanctioned in favour of the company by the district administration for building a transit colony for villagers to be displaced by the project.