Cash-rich OMC’s idle investment Rs 408 crore

BHUBANESWAR: The cash-rich Odisha Mining Corporation (OMC) received flak from the Comptroller and Auditor General (CAG) for its failure to derive benefits form investments in joint venture companies. Even as the State-run company invested Rs 408.81 crore towards equity/ preference shares in 12 joint venture (JV) companies mostly in mining sector during 2012- 2017, not a single project has been completed as on October 2017, said a report on public sector undertakings tabled in the Assembly recently. It attributed the non-commissioning of the JV project to delay in finalisation of project development agreements, failure to obtain forest clearance and inadequate monitoring by JV partners.

As a result, OMC could not derive the envisaged benefit from these projects. In 2007, OMC promoted a joint venture - Odisha Thermal Power Corporation Limited (OPTCL) along with Odisha Hydro Power Corporation, another Stateowned company to set up a thermal power plant of 3,200 mw capacity for supply of power to the State.

The State mining company invested Rs 134.2 crore towards equity in the JV. Though the project was to be completed within 48 months from April 2006, it got delayed due to delay in acquisition of private land and non-finalisation of coal mines for the power plant. The delay in project implementation led to a cost overrun of Rs 2043.83 crore. The investment of OMC’s surplus fund in the project did not yield any return, the CAG said. The State Government accepted the facts of the Central auditor in November 2017.

OMC invested Rs 3 crore as equity in the three JVs for operation of coal mines including Nuagaon Telisahi coal block. The Ministry of Coal allocated Nuagaon Telisahi coal block in favour of OMC and Andhra Pradesh Mineral Development Corporation (APMDCL) for use of coal from the mine in thermal power plants of the two states. Apart from investing Rs 1.12 crore as equity, OMC incurred an expenditure of Rs 9.64 crore towards formation of the JV company.

“The coal mine operation could not commence due to delay in preparation of DPR (detailed project report), survey of land and delay in finalisation of mining plan. As a result, the Ministry of Coal deallocated the coal block in September 2014. Consequently, the entire expenditure of Rs 9.64 crore became infructuous,” the report said. The other JVs formed by OMC include Rio Tinto Orissa Mining Pvt Ltd, Kalinga Coal Mining Pvt Ltd, Neelachal Ispat Nigam Ltd (NINL), Keonjhar Infrastructure Development Company Ltd, Angul Sukinda Railway Ltd, Haridaspur Paradip Railway Company Ltd, South West Odisha Bauxite Mining Pvt Ltd, East Coast Bauxite Mining Company Pvt Ltd and Mandakini B Coal Corporation Ltd.