Business Standard reported that Audit Report no 18 of 2020 of Comptroller and Auditor General of India reveals that Steel Authority of India Limited neither applied technical due diligence nor conducted techno-commercial study to assess viability before the allotment of its captive coal blocks at Parbatpur and Sitanala and these two blocks, which had to be subsequently surrendered, hence resulted in the amount spent on development of the same infructuous.
The audit examined records of all captive mines of SAIL for the period 2014-19 to assess the management of captive mines and compliance with safety and environmental laws. The report pointed out that since the company’s iron ore production level, at Dalli, Rajhara and Barsua mines were lower than planned, it resulted in transfer of the key raw material from distantly located mines by the Bhilai Steel Plant and Rourkela Steel Plant leading to extra expenditure on freight differential.
At its Barsua mines, the non compliance of Forest Conservation Act, 1980, on account of use of forest land for non-forest purpose, without approval led to payment of penal Net Present Value and Compensatory Afforestation. Non compliance with Odisha Minerals Rule, 2007 by Bolani mines also led to additional expenditure on differential royalty. Additional royalty payments were made at Manoharpur mine, as iron ore was graded at the highest grade and at Nandini mines on rejected limestone chips that were not suitable for iron making. Meanwhile, Government of Odisha and Government of Jharkhand demanded compensation on account of mining beyond quantity permitted under Environmental Clearance to operate by the Iron ore and Limestone mines under Raw Material Division.
Pertaining to safety and environment management in SAIL, the audit report examinations in the period under review, stated that SAIL Safety Organisation did not develop any plan or frame timeline to implement its recommendations. Out of 686 recommendations, only 258 were yet to be complied.