By Anurjay Dhal
BHUBANESWAR: With speculations are on ripe for yet another major mining scam in Odisha following high premium mining auction that left shocked many mining giants and industry watchers, Supreme Court advocate Manoharlal Sharma has sent a legal notice to Odisha and Union Government accusing authorities of both of being hand in glove with 10 bidders who were given mining lease of 20 blocks in the State through e-auction.“That within the said terms & conditions aggressive participation was done by the large players and about 190 participants left their bidding in auction process due to final outcome of cost of iron ore being not suitable to them. That after bidding was over around 10 companies were declared as successful bidder entitled for mining and holding iron ore mines situated in Odisha and written agreements have been executed between the bidders and government office,” the legal notice said, copy of which is available with www.indianewsdiary.com.
The notice was sent to Union Coal, Mines and Parliamentary Affairs, Pralhad Johsi, PM’s Principal Secretary PK Mishra, Union Mines Secretary Anil Kumar Jain, Odisha Chief Minister Naveen Patnaik, Odisha Steel and Mines Secretary Surendra Kumar and Director of Mines, Dibidutta Biswal. The notice alleges that thier action to alter or tweak conditions of te mandatory terms of action, agreement. tenders for 30 iron ore mines to favour the new mines owners who bagged mines only this January, even after the tender process was over will results in financial losees worth lakhs of crores of rupees to Odisha and Union and thereby people.
The Advocate Sharma in his legal notice argued that it is learnt from reliable sources that above said successful bidders,directly/indirectly approached you therefore you and your office are in process to manipulate mandatory terms of the tender documents/ agreement for mining for favouring them as follow “; -a. 9.1.(II) Converting average rate of sale price (as published by IBM on a monthly basis ) of mineral based on which all royalty and premium is to be calculated from state-wise to national-wise through a NationalMineral Index.b. To give effect to such changes you also intent to include the transactions or transfers done by mining companies for their selfconsumption or to some associated companies on cost plus basis to be included in the average sale price of IBM or National Mineral Index to bring down the IBM price of iron ore so that these large companies can be unduly benefitted from paying Royalty and Premium. c. you are changing terms of payment for royalty upon iron ore from 15% to 5 % which was the one of the basis foundations for arriving upon the cost to participate in bidding in Auction of the said Iron ore mines. d. To change terms to sale 25% to 50% iron ore output of Iron ore mining from reserved mines for captive use and auctioned for captive use only. e. To allow 25% iron ore from reserve for captive mines sale in open market without complying mandatory terms of prior consumption of 75% output as captive use. f. Changing of % of “Fe” grad in iron ore from 62% to less % while Since the last 50 years even in last year all these mines has been producing mostly high grade iron ore of above 62% Fe content and now your office is busy in exercise to declare it much less “Fe”contents in the iron ore about 58% to 45% to reduce actual value of iron or rate favouring unlawful gain to successful bidders and los to the states exchequer,” the legal notice added.
“That successful bidders who secured captive mines for 75% use for their consumption as captive mining and 25% output of mining to sale in the market is duty bound to consume 75% quantity of committed quantity of mining iron ore in their plant thereafter on they can sale 25% output of mining of iron ore in the open market each year. That successful bidders are liable to pay all future dues royalties, premium asper the fixed terms of IBM rate within the state rate as per the existing ruleonly. Any changes directly or indirectly effecting calculation of rate, premium amount, royalty amount and right to sale in market prior of 75% consuming in captive plant or changes to sale 50% of output mining other than 25% is not only illegal but also attract S. 409, 420 & 120-B of IPC red with PC Act upon all concerned persons involved in the above said process for causing wrongful losses to the state and wrongful gain to the successful bidders.,” it said.
“That no terms of tender documents/ agreement is allowed to be change in either manner which effect directly or indirectly reducing cost/ value of the iron ore to pay to the state / national exchequer in either manner. That according to the Supreme Court all public assets must be auctioned for the best value based upon open terms and conditions. According to the establish law and decided judgement by the Hon’ble Supreme Court after bidding process is completed, no terms of the auction / tender can be Changed/ revised in any manner,” it said.
“That your above actions, so called changes of any terms if effect directly or indirectly attract financially injury to the state and central exchequer a serious financial loss to public money which attract prosecution u/s. 309, 120-b , 420 of IPC r.w. P.C. Act , jointly and severally to all involved persons as already applied/ imposed in another coal scams case in Coal block allocation case in W.P.(CRL) 120 of 2012 in Manohar lal Sharma v/s Principle Secretary and others.That this advance legal notice is being issued in the interest of citizen of India. Petitioner reserve his all right to file a petition before appropriate forum in future within the aforesaid facts and circumstances in case of violation of any terms and law directly of indirectly effecting national/ financial interest of the citizen of India in the interest of justice,” the notice reads.
Sources in Bhubaneswar said, high premium will invite a massive mining scam again in Odisha. For example, iron ore mines fetched premiums as high as 150%. This can be understood best by an example; if 100-tonne ore is mined, then the auction winner has to give 150 tonnes or pay equivalent in cash to the Government. If the mining cost, royalty, DMF, and NMET is added, then this payment becomes costlier by another 30%, i.e., they have to pay for 180 tons for every 100 tonne mined. As expected, the big corporates jumped in the fray and secured most of the mines tilting the ratio of the captive to merchant mines to 70:30 from 30:70. Adding to this, all mid-size corporates and MSMEs were getting no mines.
The big corporates are now lobbying with the Government to reduce royalty and attempts to change the existing law of GST on premium . They are lobbying to drop prices to lower the APS determined by IBM, change the ASP ( Average Sales Price) system, reduce logistics costs so that land cost is reduced, Mixing grades to lower-grade so that lower royalty, DMF, NMET, premium are payable , manipulation in stacking, sampling and manipulation in Stamp Duty and registration .Therefore, the stark reality is that these corporates will recover the unsustainable high premium from the Government and also make profits. The loss, therefore, would be of the general public to whom these assets belong and are managed by the Government.
Odisha is the State wherein most auctions have been concluded at exorbitant premiums, which currently is making the Government smile. However, this happiness would be very short-lived if they do not intervene at present and put across their view at the Center wherein most laws are enacted. The State themselves have to find ways to stop the various tactics which are being and will be adopted by these corporates to become profitable in a situation where they were unprofitable from the day they won the auctions, they added.
