Apex court to hear Tangarpada mines case on Monday

Written by Indu Bhan | Indu Bhan | New Delhi | Updated: Jan 28 2010, 04:34am hrs
The Supreme Court will on Monday decide whether the Orissa governments decision to develop Tangarpada chromite mines on its own and cancellation of allotment of a tender to three biddersTata Steel, Jindal Stainless Ltd and Visa Steelare in the best interests of the state.

The government has proposed that the mines will be developed by a special purpose vehicle (SPV) set up by two state-owned organisations, Industrial Development Corporation of Orissa Ltd (IDCOL) and Orissa Mining Corporation (OMC), rather than private parties.

According to IDCOL, the state government had rejected bids of all the three bidders in November 2008 and has refunded the earnest money to them after it found that the bids were not financially rewarding and acceptance of any of the bids would not be in the best interest of the state. The decision to develop the mines located in the Dhenkanal district on its own was taken after IDCOL had evaluated fresh financial bids from the shortlisted companiesTata Steel, Jindal Stainless Ltd and Visa Steelfollowing the directives from the Supreme Court in February 2008.

Stating that the bidders had not questioned its rejection order, IDCOL counsel Raj Kumar Mehta said that they could not claim it as the matter of right that the state government was bound to accept any of the bids.

Opposing the Orissa governments view, Jindal Stainless (JSL), in its reply, said that the state governments decision to develop the mines on its own was illegal and violative of the apex court order.

The decision of IDCOL and the state to reject all three bids and enter into a JV with OMC is a colourable exercise of power, JSL said, adding that the bid submitted by it is beneficial to the state and to IDCOL in terms of royalty, licence fee, value addition to the mineral, industrialisation by way of setting up of a large manufacturing facility (big investment in the state), creation of ancillaries and downstream industries, profit sharing by IDCOL due to joint venture, etc.

On the other hand, it is not clear how the best interest of state could be served by entering into JV with OMC which already has 11 mining leases for chrome ore of which only three are in operation, asked JSL. The committee had said that Jindal has already put up its plant in the state. So the employment opportunity is already created independent of the Tangarpada mine.