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BSP faces flak as private sector bags iron ore deposits

Written by: Staff

Bhilai, Mar 16: Amid fast depleting iron ore reserves in the captive mines of public sector Bhilai Steel Plant, a controversy is brewing over de-reserving part of the iron ore deposits at Rowghat in Bastar region and its allotment to private companies.

In entire Rowghat area, there are six deposit blocks, known as deposit 'A' to deposit 'F'. Deposit 'F' has been further divided into seven sub blocks known as Rowdongri, Block 'A', Tarhur, Anjarel, Korgaon, Kharkhagaon and Takrel. All the main six deposits were reserved for public sector through a government notification issued in 1961.

Though these six main deposits, having an estimated 732 million tonnes of iron ore spread over 4003 hectares, were initially reserved for Steel Authority of India (SAIL) and its Bhilai unit, the process of de-reservation and allotment of Rowghat deposits to private companies began in 1995 and a major portion of deposits 'A' to 'E' had already been allotted to the private sector.

While the companies that secured prospecting licence of deposits 'A' to 'E' later moved applications for mining lease, which are still under consideration of the government, the latest controversy erupted with de-reservation and allotment of Rowdongri sub-block of deposit 'F' to private companies.

Protests are mounting here against this decision as it is being felt that handing over the iron ore deposits, earlier reserved for the PSU, to private companies would ultimately shorten the life of profit making Bhilai Steel Plant.

Legislators and prominent citizens are blaming the top officials of SAIL and BSP for allegedly soft-pedalling the issue not raising 'strong objections' against the move to de-reserve iron ore deposits for its eventual allotment to private sector.

The issue also figured in the State Assembly recently with opposition legislators, led by Congress Legislature Party (CLP) deputy leader Bhupesh Baghel, demanding imposition of a cess for de-reservation and allotment of the deposits to the private companies. Besides, they had also demanded an inquiry by the Central Bureau of Investigation (CBI) into the matter.

However, Chief Minister Dr Raman Singh rejected these demands saying that there was nothing wrong in allotting mines to private companies, which would set up plants within the state. ''Why National Mineral Development Corporation (NMDC) and SAIL should have monopoly on about 70 per cent of the mines within the state?'', he asked.

After the State Government maintained that it had recommended handing over the iron ore deposit at Rowdongri in Kanker district to private companies with the 'consent' of BSP and the Steel Authority of India (SAIL), those protesting against the decision have demanded a probe into the role of top officials of SAIL and BSP in the entire process.

Chhattisgarh Pradesh Congress Committee (CPCC) Vice-President P C Bafna sent a letter to Prime Minister Manmohan Singh, alleging that the decision was part of a conspiracy to cut short the life span of the profit making public sector unit.

He also demanded an inquiry into the alleged role of few officials of SAIL and BSP, who were on the verge of retirement, in creating a situation for granting no-objection certificate (NOC) to dereserve Rowdongri iron ore deposits for handing it over to private companies.

Even in the past also, he pointed out, there were instances of senior officials, associated with crucial BSP projects, joining private companies with similar business interests either by quitting SAIL or soon after retirement.
Mr Bafna, a former chairman of Industrial Development Corporation of undivided Madhya Pradesh, told UNI that Rowdongri iron ore block, which has been recommended for handing over to the private companies, is located very close to the main road and proposed Rowghat railway station. While private companies would get easy access to road and rail infrastructure, he pointed out, the public sector would have to incur heavy expenditure on transportation even if it gets mining lease of any of the other blocks of deposit 'F' of Rowghat iron ore mines.

Mr Vinod Chawda, a lawyer specialising in mining matters, said he felt that at a later stage, the BSP would be left with no other option but to purchase costlier ore from private parties or transport it from SAIL mines in other states by incurring heavy financial burden.

He claimed that the entire process, in which the State Government, Ministry of Mines, Bhilai Steel Plant and other organisations were involved, was completed just within 75 days which, he said, was an unusual speed and a rare phenomenon in government functioning.

On the basis of BSP and SAIL letters, the State Government recommended to the Centre to allot Rowdongri sub block of Rawghat deposit 'F' to private companies in October 2004. The Centre notified de-reservation of this block on December 3 2004, the State Government received it within next two days, and 'Rowdongri' block was allotted to the private company on a 30 year lease, he added.

These companies would get mining lease only after obtaining clearance from the Ministry of Environment and Forests.

He said a delegation of citizens from Bhilai would call on the Prime Minister and United Progressive Alliance (UPA) chairperson Sonia Gandhi to apprise about the matter which would prove detrimental to the interests of the profit-making BSP and to demand restoration of entire deposits to the public sector.

Stung by the controversy, Bhilai Steel Plant (BSP) clarified that it has pursued the issue of Rowghat mines over the last two decades in the right earnest in the wake of fast depletion of iron reserves at the plant's captive mines at Dalli-Rajhara.

In a release here, BSP threw light on the sequence of events and pointed out that its managing director had written to the secretary to the Chief Minister, expressing that the entire 'F' deposit should continue to be reserved for SAIL and BSP.

It said the plant has been making efforts to obtain clearance from the ministry of forests for Rowghat project as the future of the most profitable steel plant hinges on a green signal from th Ministry of Environment and Forests.


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