I am a politician but unable to rescue my state from this kind of Loot

Mr Srikant Jena

Former Union Cabinet Minister and Senior Congress Leader

Dear Mr Satpathy,Thank you for this kind of initiative.I hope this platform can help in making a meaningful debate on different issues concerning the state. Nalco disinvestment is on hold now by the govt of India.Though the govt has
not totaly yilded to but on political compulsion kept it on hold and I think it is not posible again for the govt to proceed inview of the resistance from UPA partners and also from within the Congress. Nalco is not only profitable but highly a profitable psu right from its inception.For the last 25 years it is making a huge profit. It is pfrofitable because Nalco gets its main raw material 'BAUXITE' IN ALMOST FREE FROM ORISSA.

Orissa posess 71%of Bauxite deposit of the country.Orissa does not get the right share from the nalco's profit rather Orissa loses in all fronts. Yes, someone may argue, afterall its a national project ,so the profit must go to the national exchequre.True. then why we only discuss about nalco's health not others ?

Now ,in the last 3years Orissa govt has handedover the most valuable buxite mines to three major private players almost free(officially)VEDANT, UTKAL ALLUMINA BIRLA GROUP AND ONE FOREIGN COMPANY BILTON.TOTAL DEPOSIT AS PER THE GOVT'S ESTIMATE OF THESE THREE DEPOSITS IS NEARLY "5LAKH CRORE RUPEE."

News papers and other media are captive to these pvt giants.Politicians of allmost all parties are soldout and have converted themselves as bonded labourers of these pvt houses.I am a politician and since i am unable to rescue the state from this kind of loot so you can put me to that catagory also.There are few burocrats who can withstand the pressure and a new trend in burocracy has emerged in recent years perticularly the younger lots are more pliable to to the temptation of these looters.

SO, MY DEAR SACHI ,LETS DEBATE THE LOOT OF THE STATE BY THE THE BIG NEXUS OF POLITICIAN-BUROCRAT-PVT COMPANY IN THE NAME OF SO-CALLED INDUSTRIALISATION IN THE STATE IN A PROPER MANNER WHICH WILL REALLY HELP THE STATE AND WE CAN OVERCOME AND LIBERATE OUR PEOPLE FROM POVERTY.

NALCO DISINVESTMENT IS A SMALL ISSUE COMPARE TO THIS.WE WILL DISCUSS INDEATIL KEEPING POLITICS FAR AWAY IN THE GREATER INTEREST OF THE STATE.PEOPLE RESPONSIBLE IN MAKING THE STATE AS THE POOREST ONE IN IHE UNION OF INDIA MUST BE BROUGHT TO BOOK IRESPECTIVE OF THEIR POLITICAL STATUS OR POSITION.THANKS.
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Dear Friends,I am writing this letter at a very crucial juncture of the state’s history with a host of domestic and international companies rushing the state to loot our minerals. At this hour of crisis, we need to rise above our political differences in the greater interests of the state and the masses looking at us for their well-being.

It is a shame that after 57 years of independence, the state is billed as the poorest state with more than 50% of people struggling to eke out a livelihood. The irony is that all along, we had been tom-tomming about our rich natural and mineral resources. The state’s economy is characterized by lowest per capita income in the country largely due to handing over our high value mineral resources to the private companies and individuals for a song. Here I am presenting below few cases for your information. Iron-Ore: Orissa has a total reserve of 4177 million tons of iron ore, which is about 34% of the country’s total reserve. In the last four years, the booming prices of iron ore have benefited the lease holders and what the state and its people got is just pea nut. I am
citing cases of four major players having iron ore mining leases in the state reeking mind blowing profit.TISCO - This Company has mined about 20 million ton of iron ore in the last four years. It has minted at least Rs.3000 crore only from the iron ore it mined. The calculation has been made on the basis of average ex-mine market
price of iron ore at Rs.2000 per ton. Just take away the royalty of Rs.26 per ton + mining cost of Rs.300 per ton. Adding other expenses, the cost of iron ore at ex-mine will be at best Rs.500 per ton. That means the company made a minimum profit of Rs.1500 per ton of iron ore.A B Birla Group [S L Mines] - Going by the profit as state above, this group, which mined about 12-15million ton of iron ore in the last four years, made a profit of around Rs.2000 crore. Rungta - This Company also had mined about 12-15 million ton in last four
years making a neat profit of about Rs.2000 crore. Jindal [Sharada mines] - This company has also mined
about 12-15 million ton in the last four years making a minimum profit of Rs.2000 crore.

The above four companies have made a whopping profit of Rs 9000-10,000 crore in the last four years. We have not taken the production of iron ore by other companies including public sector SAIL, OMDC and OMC. What Did Orissa Get? The state government got a meager Rs.150 crore as royalty in the last four
years from the above mentioned four companies. The moot question is why and how these companies are allowed to plunder the state? There is an urgent need for a fresh look into the whole gamut of the state government’s mineral policy. The state government has signed MoUs with as many as 36 private companies
>by allowing them to plunder the mineral reserves. The latest entrant to eat away our resources is South korean steel major, Posco.

The state government have signed on June 22, 2005 a MOU with Pohang Steel Company (POSCO) of South Korea for 60 crore tons of iron ore. This means a transfer of Rs.90, 000 Crores (Rs.1500 per ton X 60
crore tones) of Orissa’s mineral wealth to the South Korean company at current rupee price of iron ore per ton.

The Japanese and Korean steel plants buy ores globally and so there is a market price of ores. Particularly, POSCO buys iron ore at market prices to produce steel. In 2004, POSCO sold 30 million tons of crude steel for $190 billion with a net profit of $37 billion. From 12 million tons of crude steel POSCO will produce from Orissa’s iron ores per year it can thus generate an estimated net profit of $14.8 billion per year even if POSCO buys our iron ore at prevailing market prices.

Why should Shri Naveen Patnaik agree to sell Orissa’s iron ores to POSCO for 6% of market price fetched by OMC from the same mines slated to be transferred to POSCO, unless, of course, private deals for kickbacks have been made? Such private deals for self-enrichment, going on during the last three decades, have ruined our public wealth, making Oriyas poorest, most illiterate and sickest in India.

Bauxite: Let us consider other minerals too. In the cases of Vedanta, Utkal Alumina of Birlas and others, bauxite pricing was done without taking market prices into consideration. These companies would rake up net profit of over Rupees one lakh crore in the next three decades by exhausting our resources.

Chromite: The state has the monopoly by having 98% of the deposit. Six private companies are making a profit of Rs.6000 crore every year by paying a meager Rs.150 per ton as royalty against the market private of more than Rs.5000 per ton of chrome ore. Again Tisco is making a net profit of Rs.600 to Rs.700 crore every year in chrome ore.

This grave economic injustice to the people of Orissa calls for an open debate on the efficacy of the present mineral policy, which has facilitated the crony industrialist to loot and plunder away our minerals by enriching
a section of ever greedy bureaucrats and vested politicians. Now multinational companies also are eyeing for these reserves. Will Posterity Pardon Us?

Can all of us remain mute spectators to the open loot? Will our posterity pardon us for these grave mistakes if we allow this loot to go on?

LET THE INDUSTRIES BE CAPTIVE TO OUR MINERAL RESERVES, NOT THE OTHER WAY
ROUND.

This is the practice across the globe. Let there be industrialization, but not on the terms and conditions dictated by the private companies.

In the market driven economy, the price of a litre of milk from OMFED you buy is determined by the market forces. So also other commodities.

Why should not TISCO, POSCO, VEDANTA, JINDALS, BIRLAS, RUNGTAS and others >be asked to buy the minerals at the prevalent market price?

Tens of thousands of small sector industrial units are sourcing their raw materials at market price. Even a couple of steel plants in the country are buying iron ore at the prevalent market rate. Why is the state government subsidising heavily these big and large steel manufactures and mine owners?

Orissa would have been richer by at least Rs 40,000 crore had it opted to sell its iron ore at the prevalent market price and could have easily cleared its debt stock of Rs 40,000 crore.I call upon you to seriously ponder over the issues raised above and force the Government to scrap the present mining policy.
The state government must put hold on the implementation of MoUs till a new mining policy is in place following proper debate and consultations with all the stakeholders.

Let the Government come out with a new but progressive mineral policy keeping the public interest in mind by incorporating market price as the benchmark for optimum utilisation of all kinds of minerals benefiting all
the stakeholders. I am sure you will rise above party lines keeping the state interest in view to ensure market price for our valuable minerals.

Let me put few questions arised out of the clarification sought by the then Governor of Orissa Mr Rajendran from the State govt on this issue.

1)Naveen Patnaik Govt's stand is ---Since the 1997 MOU of Mr J.B. Patnaik with Vedant was in force we had no option than to sign an agreement within the framework of '97 MOU.

Question arises -- A)If '97 MOU was in force then why another MOU was signed between Vedant and State govt/OMC in 7th of June 2003 ? B)Is any MOU mandatory legally on any Party? C)Is not the '97 MOU became redundant after 1999 amendment of mineral concession rules by Govt Of India ? 2) Vedant Refinary Foundation stone laying by Mr Naveen Patnaik before one year of agreement--Govt says in its note that it has nothing to do with mining of Bauxite.

Question arises--A)If it is not linked to bauxite mines then it is linked to what? This is not a jewelery shop opening or automobile show room.Without bauxite mines how can that refinary work? Let people know the real story behind the Foundation stone laying ceremony of vedant. Even detective cinema will fail .

''LOOK I AM BRINGING INVESTMENT TO ORISSA AND THESE PEOPLE ARE NOT TOLERATING MY POPULARITY AND TRYING TO MISLEAD THE PEOPLE''.Slogan of
Naveen.

By laying foundation stone of vedant's Refinary before one year of inkikng the agreement what messege Mr Naveen Patnaik wanted to give to the world and perticularly the SHARE HOLDERS OF VEDANT AND ALSO TO THE PROSPECTING SHARE HOLDERS? -That, yes, I as Chief Minister of Orissa solemnly
taking the oath that --

''I AM DOLINGOUT THIS PROPERTY WORTH OF ONE LAKH CRORE OF PEOPLE OF ORISSA
TO MY FRIEND PHILOSOPHER AND GUIDE SRI ANIL AGARWAL WITHOUT ANY FEAR AND
FAVOUR OR CONSIDERATION.

Is it not a fact that after the foundation laying ceremony the vedant share price has sky rocketed and benefited Anil agarwal immensly? 3)The price of bauxite ore-- The State Govt says ---Mining cost +Royalty and other statutary dues to govt is price of Bauxite. To substantiate to that the argument given is Nalco ,Balco and Hindalco's captive mines and its price. If Govt of india's policy is to give bauxite mines to captive user then how could OMC got this mining lease from govt of india?There is no such policy by govt of India that captivity of bauxite ore will be to Industry only. It is only a ploy to escape and confuse the public scrutiny.

The way the State govt has told to press and explained to the Orissa Assemly that----

''NON TENDERING OF BAUXITE ORE IS A MUST. WE CAN NOT INVITE TENDER PUTTING
THE SAME CLAUSE WHICH IS IN VEDANT AGREEMENT .BECAUSE WE ARE IN LONG
NEGOTIATION WITH mR aNIL aGARWAL.( LOOSING ABOUT 50 THOUSAND CRORE TO THE
STATE EXCHEQURE ) AS IF IT IS ENSHRINED IN THE CONSTITUTION OF INDIA FOR
WHICH IT COULD NOT BE PUT TO TENDER.

Question Arises ---A)WHEN GOVT KNOWS THAT NALCO MAKES A NET PROFIT OF ABOUT
1000 TO 2000Cr EVERY YEAR OUT OF A PLANT SEIZE half OF VEDANT THEN WHY AT
ALL THE STATE WENT FOR AN NEGOTIATION WITH VEDANT and Vedant ONLY.

OMC COULD HAVE GONE FOR A REFINARY AND SMELTER.MONEY IS NOT A PROBLEM FOR THIS TYPE OF PLANT WHEN YOU HAVE A CAPTIVE MINESAT YOUR COMMAND. STATE WOULD HAVE MADE A PRNET PROFIT OF 2000Cr EVERY YEAR. mY QUESTION IS WHY THE sTATE OF oRISSA CAPTIVATED ITSELF TO MR ANIL AGARWAL ?


The U.S.A consumes the highest Alumina and Aluminium in the world and to their plants in USA they purchase bauxite from different countries of the world in market price which is now about 47 to 50 usd.The state govt has given the price of bauxite of cement grade not of alumina grdade as 178rupees. The officers engaged in this misleading buisness are really not serving under state but actually working on the pay rolls of these type of
fradulent companies. Some officers have decided to join vedant just after their retirement.

I think the above mentioned issues will be clarified by the state govt in the public interest.

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