Panel asks Centre to take up Nalco lease issue with Odisha

  • 18/12/2011

  • Business Line (New Delhi)

A parliamentary panel has expressed displeasure over delays in Nalco’s expansion plans mainly due to failure to get leases for bauxite and coal mining in Odisha, and has asked the Mines Ministry to take up the matter at the highest level with the state government. Investment to tune of Rs 6,500 crore for state-run National Aluminium Company’s (Nalco) third phase expansion has been put on hold due to difficulties in acquiring mining leases for Pottangi bauxite deposit in Odisha with reserves of 75 million tonnes and Utkal—E coal block. “The committee is constrained to observe that no significant progress has been made ... Early development of above projects is significant in view of ongoing expansion plan of the company. The Mines Ministry should take up this matter at highest level with Government of Odisha,” the Standing Committee on Coal and Steel said in its report. The committee in its report, tabled in the Lok Sabha, also directed the aluminium maker to “come up with attractive compensation packages (for land acquisition) and proper implementation of rehabilitation and resettlement policy so that the grievances of project affected people are addressed“. Utkal E block with 67.4 MT reserves of coal was alloted to the company by the Coal Ministry in 2004 but the same could not be developed for want of land acquisition. This, along with difficulties in acquiring mining lease for Pottangi bauxite deposit has made Nalco to put on hold investment to tune of Rs 6,500 crore for third phase expansion as existing reserves will last only for over a decade. “As with implementation of third phase expansion, existing reserves will last for 14 years only ... Pottangi bauxite reserves will help for enhancing the life of refinery by another seven years, that is, up to 2032,” the Mines Minister, Mr Dinsha Patel, had said last month. The parliamentary panel has also said that delays in execution of expansion plan is impacting the performance of the company. “The expansion plan of Nalco ... has been badly hampered...thus affecting their overall performance,” it said. Apart from delays in land acquisition, the panel also pulled up the company and the Mines Ministry for delays in procurement of equipment for expansion. “The Committee regrets to observe that procurement of equipment have been delayed on account of complex administrative and procurement procedure and the Ministry has given no assurance to improve the system,” it said. “The Committee hardly needs to emphasise that immediate steps need to be taken to tone up the administrative processing and simplify the intricate procurement procedures to avoid cost and time overrun,” it added.