Sale of iron ore by NMDC to private companies resented

According to latest reports, the NMDC, a CPSE which earlier supplied iron ore from Chhattisgarh iron ore mines in Kirandul and Bacheli has since asked VSP to procure ore from NMDC's mines in Karnataka, imposing an additional cost of Rs 1500 per metric tonne.

Visakhapatnam: Former union Secretary EAS Sarma has strongly objected the sale of iron ore by NMDC to three private companies in preference to the public sector Visakhapatnam Steel Plant and called for a full-fledged investigation.

In a letter addressed to union Steel Secretary Nagendra Nath Sinha here on Thursday, he noted that the Centre’s step-motherly treatment of the Visakhapatnam Steel Plant (VSP) suggested that it is a deliberate attempt on the part of the Centre to weaken the VSP so that its value may decline, facilitating its sale to a chosen private party at an abysmally low price. I feel that it is a matter that calls for an investigation by the CBI.

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According to latest reports, the NMDC, a CPSE which earlier supplied iron ore from Chhattisgarh iron ore mines in Kirandul and Bacheli has since asked VSP to procure ore from NMDC’s mines in Karnataka, imposing an additional cost of Rs 1500 per metric tonne.

“Apparently, NMDC is diverting ore from Kirandul and Bacheli to private steel companies such as ArcelorMittal Nippon Steel, JSW Steel and JSPL. In addition to the additional cost burden, iron ore supplies to VSP from Karnataka would involve logistic problems with the Railways, which your Ministry has not been able to resolve in similar cases.

This is a typical case of one CPSE letting down another CPSE, involving benefits being passed to a few private companies at the cost of the CPSE. I do not see any reason why NMDC cannot supply ore from the Kirandul/ Bacheli mines to VSP at a market-discovered price to enable the latter to function without incurring losses,” he remarked in his letter.

In this context, Dr. Sarma also noted that the Steel Ministry cannot say that VSP is an independent CPSE and it has no role in its management, as two of the Ministry’s senior officers are a part of NMDC’s Board.

Moreover, DPE’s disinvestment policy guidelines had taken away whatever little autonomy that NMDC has, he observed, adding that on the basis of the previous track record of CPSE disinvestment, in which the sale of two valuable CPSEs, CEL and Pawanhans had to be aborted in the last minute as both turned out to involve highly suspect deals, one could not but infer that the way the Central Ministries had so far dealt with the case of VSP raises similar apprehensions about their intentions, he said.

He urged the Centre to treat the CPSEs in a fair manner, ensuring that the disinvestment policy did not imply undue benefits to private companies.