The ministry has sensed a scam of sorts in RINL. An internal assessment report of the department of expenditure has demanded the appointment of independent auditors to probe why RINL's three coke oven batteries have packed up in six years when their normal life-span is 15 years. Each battery costs Rs 350 crore and repairs will cost Rs 150 core apiece.

North Block is upset by the way the company is being run. Its opposition has now put a spanner into the works of the steel ministry-sponsored bailout plan for RINL, which involved writing down equity capital, while simultaneously going in for an expansion to escape from the grip of the Board for Industrial & FinancialReconstruction (BIFR). The proposal was sent to the finance ministry in the form of a plan to the cabinet committee on economic affairs.

In a scathing appraisal of the expansion plan, the internal finance ministry report says that there is, at present, a 45 per cent oversupply of long steel products in the market and a foray in this direction will only cause more financial loss to RINL. "In five years time, the excess of capacity over demand will still be in the range of 20 per cent on the assumption that no fresh capacities will be put up in the interim period," the report adds.