Does that file exists?
It looked that it doesn't and you didn't have write permissions on the public_html folder.
That file should be created by the installer, if not, once in the step#2, copy config-sample.php and rename it to config.php, edit it with the information of your site/database and reload step2, hope that works
I'ts important to do that on the step#2, if you do it before, OSClass will think it's installed and you will not be able to install it again, but as I said before, it seems that you don't have write permissions on the root folder...