Cabinet approves relaxation in penalty on steel industries

Bhubaneswar: The State Cabinet on Thursday approved a proposal for relaxation in penalty on local steel industries under the long term linkage policy (LTLP).

Under the policy, local industries were earlier provided 70 percent of iron ore and 50 percent chrome ore for their total production by the Odisha Mining Corporation (OMC). With the approval of the amendment, there will now be relaxation in the MoU provision under the LTIP, especially on the penalty provisions.

“As per the earlier penalty provision approved under LTIP, if any steel industry fails to lift 90 percent of its allotted ore, it has to pay a penalty of five percent of the sale value of its total allotted quantity. But industries later complained that the penalty amount was excessive and sought a rationalisation in the penalty clause by linking it with the unlifted quantity and not with the entire quantity. Considering their request, the Cabinet has decided that henceforth, the detailed provisions under LTLP would be decided by the OMC Board which can also provide further relaxation ike credit sale to these industries,” Steel and Mines secretary RK Sharma said after the cabinet meeting today.

He said the decision has been taken considering that steel industries are passing through a difficult phase due to low demand.

The Cabinet also cleared a proposal for creation of a directorate of steel in the state.

“The steel industry has now developed. Steel and allied sector industries like sponge iron and pellet plants are now major industries in Odisha. We have a directorate of Mines and a directorate of Geology. Recognising this and the fact that there is no single agency to deal with the problems of the steel industries, the state government has decided to create a directorate of Steel which will be a composite department. The directorate would be headed by the additional secretary, Steel and Mines, who will engage outside consultants and advisors having experience in Steel industry to advise the state government on matters relating to the steel sector,” the chief secretary informed.