 "Santosh Nayar")
The recent Supreme Court notice to the state government to file response on Essar Steel’s plea for providing an iron ore lease for its steel plant as per its Memorandum of Understanding (MoU) with the state government has brought fresh legal trouble since the government is yet to comply fully to the top court order in a similar case filed by Bhushan Steel and Power Ltd (BSPL).
Last week, after hearing a writ petition filed by Essar Steel, the top court issued notices on the company's plea of Odisha government not keeping its promise of providing iron ore lease as committed in the MoU signed in April, 2005.
The state has been asked to reply to the notice within six weeks from the date of receiving the order.
Though officials in state steel and mines department denied receiving any such notice, sources said, the government is aware of it and is contemplating to send its views regarding the matter after consultation with the law department.
“A government advocate has informed about the SC notice in Essar Steel case. The government will send its respond after getting the copy of the order,” said a senior official of the state steel and mines department.
In December 2012, the state government was forced to recommend a mining lease in favour of BSPL in Thakurani mines of Keonjhar district after a SC order asked it to do so as per the MoU.
BPSL, in February this year, claimed that the state government only recommended grant of 96 million tonne of iron ore reserves and is yet to send the recommendation for an additional 128 million tonne in Koira circle of Sundergarh district to meet its requirement of 1.6 million tonne of iron ore annually for 50 years. The company has filed a contempt case against the state.
The state is yet to send its response in the matter.
The government is in a fix following the fresh Supreme Court order as it has already made up its mind about not to provide any iron ore lease to any proposed steel plant.
In a notification last year, the state mines department had asked the industry department to renew all lapsed MoUs without any guarantee for providing the raw material.
The instruction to strike out the raw material clause was based on the premise that the government wanted to sell all iron ore produced in its region via e-auction mode to gather additional revenue. The plan is yet to take off due to legal hurdles.
“After the Supreme Court order, companies who have invested heavily in the state regarding land acquisition and plant construction might go to the court demanding a captive mine,” said an official of a company, which signed MoU with state for establishment of steel plant.
The state has so far signed MoUs with 49 companies for establishment of steel plants. Only six companies such as Tata Steel, Essar Steel, BSPL, Bhushan Steel Limited, Brahmani River Pellet ltd, Jindal Stainless Ltd and Jindal Steel and Power Ltd (JSPL) have completed partial construction as of now.
