COVID-19: JSW Steel diverting liquid oxygen for industrial use has Karnataka worried

On June 1, senior IAS officer N Manjunath Prasad, Principal Secretary of Revenue Department in Karnataka, issued a notice to JSW Steel in Ballari district, warning it for undersupplying the liquid medical oxygen (LMO), as allocated by the Union government to the state government. However, between issuing the notice on June 1 and June 6, there has been only partial improvement in its supplies to the state government. The resultant shortage has the state government on its toes even as Karnataka has been seeing a steady downward trend of new COVID-19 cases over the past several days. Incidentally, JSW Steel and the four oxygen-producing companies on its campus is the source of 70% of the total liquid medical oxygen in the state.

“There has been an average shortfall of about 150 to 200 MT daily and it is being met by special oxygen supplies from Jamnagar, Gujarat and other outside supplies,” said Munish Moudgil, senior IAS officer in charge of LMO distribution in the state. He added that the shortfall is due to poor supply by state-based manufacturers as they have diverted it (shortfall amount) for steel production. According to Karnataka government records, the state has received a daily average of 497.14 MT (metric tonnes) of liquid medical oxygen from the company over the last seven days (ending June 6) as against the daily allocation of 830 MT from units within the state. This means that JSW Steel has been supplying less than 50% of the daily allocation as mandated by the Union government.

It is to be noted that the Union government is the sole authority regarding the usage of liquid medical oxygen. This means that Karnataka can only use its allocated share set by the union government, even though more is produced within the state. Accordingly, the Union government had allocated about 1,200 tonnes of oxygen per day to Karnataka. While 830 MT is the daily allocation within the state, 380 MT is the allocated supply from manufacturers outside the state. Due to logistical hurdles, the state cannot use the allocated 380 MT.

Going by the available government data shared by the state-level War Room, the state utilised 639.91 MT on June 4 and 549 MT on June 1, indicating that the state’s high dependency on private unregularised sources. This is concerning, especially in light of the incident on May 3 and 4, when 24 COVID-19 patients died due to a shortage of oxygen in the Chamarajanagar district of the state.

N Manjunath Prasad, the member-secretary of the state executive committee, State Disaster Management Authority, issued the warning notice to JSW Steel under the Disaster Management Act, 2005. In the notice on June 1, he warned the steel manufacturing company that non-compliance will attract action under sections 57, 58 and 60 (includes fines and imprisonment) of the Disaster Management Act, 2005, and other legal provisions, including section 188 (disobedience to order duly promulgated by public servant) of the Indian Penal Code.

When asked if there has been any follow-up in this matter, Manjunath Prasad directed to senior IPS officer Prathap Reddy, who is the nodal officer for oxygen supply. However, Prathap Reddy could not be reached for a comment.

This present crisis comes as Karnataka had to manage shortfalls of around 220 MT for two days in the last week of May owing to the tripping of two plants, Linde Gas India (earlier called Praxair) and Air Water. Linde Gas and Air Water are two of the four companies on the premises of JSW Steel in Ballari that agreed to produce and supply oxygen for the steel company. Apart from the units in Bengaluru and Tumakuru, these companies are captive oxygen suppliers of JSW, although they are separate legal entities. They are set up within the campus of JSW Steel and have long-term contracts with the company.