State for NINL expansion, opposes trading fee by MMTC
Bhubaneswar: Ahead of Nilachal Ispat Nigam Limited (NINL)`s board meeting, state government on Monday decided to ask Mineral and Metal Trading Corporation (MMTC) not to charge trading fee from the joint venture, official sources said.
The decision, ahead of the crucial board meeting tomorrow, was taken at a meeting attended by state Finance Minister Prafulla Ghadai, Steel and Mines Minister Raghunath Mohanty, Chief Secretary B K Patnaik and other senior officials of the state government.
"MMTC which had invested Rs 190 crore in NINL as the major stake holder in the joint venture, had already taken Rs 400 crore towards trading charge on sale and purchase of NINL," Ghadai said after the meeting.
Stating that NINL had been incurring losses due to inadequate investment, Ghadai said MMTC should hand over the trading assignment to the company (NINL) in order to improve its financial condition.
Countering Orissa government`s claim, MMTC Direcor (Marketing) Ved Prakash said MMTC has so far invested Rs 370 crore out of which Rs 180 crore was meant for expansion work.
"We are keen to undertake expansion of NINL and make it a profitable company" he said.
"The state government was yet to get the benefit from the project even as it invested Rs 105 crore during initial stage," Ghadai said adding NINL was also given an iorn ore reserve in the state.
NINL`s peripherial development and corporate social responsibility (CSR) activities and employment for local youths were also not satisfactory, the minister pointed out.
NINL, a joint venture between MMTC (about 50 per cent) and the state government (27 per cent) and rest by other stake holders.
The state-owned Industrial Promotion & Investment Corporation (IPICOL) and Orissa Mining Corporation (OMC) have funded the 27 per cent on behalf of the state government.
The state government also felt that adequate steps were not taken to expand NINL even as the plant has more than 2,500 acre of land and a dedicated iron ore reserve.
"We propose to expand NINL`s capacity to 5 mtpa from the existing 1.1 mtpa," Ghadai said adding the company had been recognised as the country`s largest pig iron maker.
The state government said that while private steel industries were taking huge benefits from the boom in the steel sector, NINL failed to utilise the opportunity.
Ghadai said the state government would also ask the stake holders to invest more money in order to make NINL a profitable venture.