Indian minister’s quick approval of new projects angers green activists

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br INDIA-POLITICS-MINISTER Reuters Veerappa Moily heads India's oil ministry and its environmental ministry, raising concerns about a conflict of interest. Photo: Reuters

New Delhi - Veerappa Moily has two seemingly incompatible jobs.

As oil minister, he has overseen India’s petroleum and natural gas needs. But now he also runs the environment ministry, where he has issued permits for 100 stalled projects in a month-long spree that has delighted industry but shocked green activists.

Since taking the environment portfolio on December 24 last year, he has given his go-ahead to projects worth some $40 billion (R444bn), including Posco’s $12.6bn steel plant and forest clearances for major hydropower projects.

Moily’s haste is part of a last-minute push by India’s outgoing government to revive investment in the economy after two years of slow growth. The general election is due by May.

But the friction the clearances caused go to the heart of an old dilemma: how to develop quickly in a country plagued by poverty while minimising environmental damage.

Moily has said his approval push was “necessary”.

“On the planet there is space available for the wildlife, for the forest and also for the human being,” he said, vowing to take decisions by February 15 on a backlog of projects worth about $100bn.

Environmental campaigners are outraged at Moily’s twin jobs, accusing him of steamrolling opposition to some projects from tribal populations and ignoring concerns about biodiversity. One group dubbed his appointment “shocking and bizarre”.

“You have given speedy clearances by ignoring all the stakeholders except the corporates,” Greenpeace said in an open letter to Moily. Citing a “clear conflict of interest” between his two portfolios, it demanded his resignation.

Moily denies he is unduly favouring industry, saying he will not bypass environmental rules. He cited his rejection of Vedanta Resources’ plea to mine bauxite in the Niyamgiri hills of Odisha state after local residents opposed it.

“It is not a question of favour. If you are not taking a decision, ultimately what happens… you are working against the interest of the nation,” he said.

Even though Moily’s environmental clearances are in some cases the final hurdle in India’s notorious thicket of bureaucracy, it will still take time to get the projects going. Tight liquidity makes raising funds tough right now and, before investing, many companies will wait for the formation of a new government.

Still, many say the minister has an eye on the election.

“Clearly, it’s a move to try and get things going before the elections. One last chance for the government,” said Sam Mahtani of F&C Asset Management in London, which manages emerging market equities.

Moily’s hyperactivity coincides with the rise of opposition leader Narendra Modi, who has won popular support presenting himself as a man of action trusted to revive the economy, build roads and create jobs by slashing red tape.

The outgoing government has targeted spending $1 trillion on infrastructure projects over the five years to 2017, but it has fallen short of previous goals and much of the country is plagued by power blackouts and bumpy roads.

After being panned for dragging his feet on decision making, Prime Minister Manmohan Singh formed a cabinet body last year to track stalled projects. In many cases, bottlenecks were traced back to the environment ministry.

In five weeks, Moily has softened the rules for coal mine expansion, allowing some mines to increase output by 4 million tons a year without further approvals. He has made it easier for mines to renew leases, cleared an oil pipeline and given a crucial permit for a coal power station. – Reuters


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