R Krishna Das
Chhattisgarh top bureaucrats were in a fix when the then Chief Minister Ajit Jogi exhorted that the state government would “purchase” Bharat Aluminium Company Limited (BALCO) listed for strategic sale way back in 2001.
What put the officials in a sticky situation was a clear policy to proceed with. A series of letters were posted to the Centre and even officials were rushed to New Delhi to discuss the issue with the authorities concerned, but still the state government had no concrete plan.
“No proposal was sent to the Centre for purchasing BALCO and the matter gradually went under the cold carpet,” a senior official with the industry department told News Riveting. The uproar over BALCO’s disinvestment literally proved to be political.
After nearly two decades, Chhattisgarh is again on a move—this time to purchase a steel plant. Chief Minister Bhupesh Baghel said if the Centre went ahead with its plan to disinvest Nagarnar Steel Plant (NCP) in Bastar, the state government was ready to purchase.
But a lot of water has gone under the bridge over the period. In 2001, Chhattisgarh was a nascent state and had least financial obligations. But now, investing a huge amount of money to purchase and run a steel plant would not be an easy task. Minimum floor price for the facility is likely to be Rs 23,140 crore.
The state government had to participate in the competitive bidding with the private players and hence the price would further escalate. Since the state is reeling under financial crises and many schemes are on the ground, is it viable for Chhattisgarh to invest in a steel plant?
“No way, as there are basically two reasons to support,” said financial experts. Firstly, it was not the state’s business to run a steel plant as Chhattisgarh would probably be the only state in the country to do so. The condition of state-run power plants spoke volumes. Secondly, investing such a huge amount from the state exchequer was a bad economy.
Now, suppose the state government asks Centre to give the plant free of cost against the land it has allotted for the 3-mtpa plant that has come up in 1,980 acres of area. The possibility is bleak as the Union Government itself is eyeing huge revenue for its kitty from disinvestment.
Moreover, the investment in infrastructure and machineries could not be exempted for the Chhattisgarh government. It has to at least pay Rs 17,186 crore that NMDC has so far invested.
The other available option for the state government was to form a Joint Venture (JV) with public or private players and bid for the plant. But the JV model in Chhattisgarh had always been under the scanner.
Chhattisgarh Mineral Development Corporation (CMDC) formed a JV with NMDC in 2008. The new entity NCL (NMDC-CMDC Limited) got the environment clearance in 2015 to mine 10 million tonnes of iron ore from Bailadila Deposit-13 mine spread over the lease area of 413.74 hectares in Dantewada district.
The huge reserve of 326 million tonnes with high-grade steel-making raw material is lying unexploited as the state government failed to address a law and order issue in the area. Without any investment and efforts, the state government was supposed to collect over Rs 2000 crore annually from the project.
