US based mining and construction equipment leader Caterpillar Inc has said that fresh investments into India will depend on the local government coming out with a clear policy on environmental issues.
Caterpillar will, however, not stop ongoing investments worth USD 300 million into the country and may even invest more in case it bags a diesel locomotive contract worth between USD 4 billion and USD 5 billion with the Indian Railways. The deal involves supply of 100 diesel locomotives every year for the next 10 years. The contract is expected to be awarded in the first half of next year.
The Caterpillar India, China and Asean Country Manager, Mr Kevin Thieneman told Business Line that the problem lay with the environment ministry.
He said that “Some of our good customers had approved projects but suddenly it has been removed because of some environmental issues. We had some bad actors who don't respect rules, but it is not true of the entire industry. Those companies which respect rules, they are getting penalized. We are getting close to a crisis.”
He quoted instances of two multinational companies which are facing issues concerning environmental clearances for their projects in India. Mr Thieneman said that “If you don't let a POSCO or ArcelorMittal to come in and give the iron ore and build the steel mill, industrial companies like Caterpillar can't source steel from India. If I have to get my steel from Indonesia or China, why should I build my product in India? Why should I expand here? We are getting close to a crisis.”
He also pointed out that if Caterpillar wants to invest further in India, he will be forced to share issues concerning environmental clearances with his company. He said if India does not come out with objective standards on these issues and enforce them uniformly, it will have serious negative consequences for India in the near and mid term.
He pointed out that during the last six to eight weeks, there were lot more positive signals coming from the Government. He said that Caterpillar is working with apex industry associations on solving these issues. We are making some progress, we are ratcheting up the message.
(Sourced from BL)
