SC notice to Tisco in Orissa mining row

The Supreme Court today issued notices to the Tata Iron and Steel Company (Tisco) and Visa Industries in the row over the development of the Tangarpada chrome mines in Orissa. The court was acting on appeals by Jindal Strips and the Orissa government.

In November 2004, the Orissa High Court had cancelled the selection of Jindal Strips as the joint venture partner with the state Industrial Development Corporation (IDC) in the project.

Tisco and Visa International had moved the high court against the selection of Jindal Strips.

The Supreme Court bench, consisting of Justice PV Reddi and Justice AK Mathur, fixed the final hearing of the appeals in March. However, there was no stay on the high court judgment, which had cancelled the joint venture plan of IDC and Jindal Strips.

The high court had directed the state corporation to issue a fresh advertisement to select a joint venture partner. It also asked the corporation to clarify whether it wanted a stainless steel unit to be set up or any other unit where chrome could be used as an ingredient.

Jindal Strips submitted before the court that the IDC's technical committee had found that only it had planned to make substantial value addition, whereas the other two competitors did not have a feasibility plan for value addition. Thus, the financial bids of only those parties were opened, which fulfilled this preliminary condition.

The chrome mines were lying idle for a long time and the state corporation wanted the mines to be activated for captive consumption in industries that required it, with the objective of rapid industrialisation of the state. It wanted downstream industries to benefit, including investments from industrial groups outside Orissa.

Therefore, it chose groups which would go in for value addition. Jindal Strips claimed it was chosen, as the corporation found it fulfilled the requirements.

It had planned to set up an integrated stainless steel plant at a cost of Rs 7,000 crore, which would create 2,000 jobs and generate Rs 1,000 crore in taxes. The two competitors were not found eligible according to these criteria, it was argued.

The opposition Congress had raised a hue and cry over the high court's judgement and had demanded the resignation of Chief Minister Navin Patnaik, alleging a scam in the allotment of prime mines to the private party without safeguarding the state's interests.

The state government in its appeal gave details of the manner in which the bids were evaluated by the technical committee and said the latter found that only Jindal Strips planned to make substantial value addition whereas Tisco and Visa did not have any feasible plan for value addition.

Whose mine

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• SC acts on appeals by Jindal Strips and the Orissa government
• In November, the Orissa High Court had cancelled the selection of Jindal Strips as the JV partner with the state IDC lTisco and Visa Industries had moved the HC against Jindal's selection
• However, there was no stay on the HC judgment, which cancelled the JV plan of IDC and Jindal Strips