SAIL spend on mines infructuous; laxity high in safety measures: CAG report

State-owned firm neither applied technical due diligence nor did techno-commercial study to assess viability before allotment of its two captive coal blocks, says report

State-owned Steel Authority of India (SAIL) neither applied technical due diligence nor conducted techno-commercial study to assess viability before the allotment of its captive coal blocks at Parbatpur and Sitanala, audit report no 18 of 2020 of Comptroller and Auditor General of India (C&AG) said today.

These two blocks, which had to be subsequently surrendered, hence resulted in the amount spent on development of the same infructuous, examined the audit.

The audit released today examined records of all captive mines of SAIL for the period 2014-19 to assess the management of captive mines and compliance with safety and environmental laws.

The report pointed out that since the company’s iron ore production level, at Dalli, Rajhara and Barsua mines were lower than planned, it resulted in transfer of the key raw material from distantly located mines by the Bhilai Steel Plant and Rourkela Steel Plant leading to extra expenditure on freight differential.

 

At its Barsua mines, the non-compliance of Forest Conservation Act, 1980, on account of use of forest land for non-forest purpose, without approval led to payment of penal Net Present Value and Compensatory Afforestation, informed the report.

Non-compliance with Odisha Minerals Rule, 2007 by Bolani mines also led to additional expenditure on differential royalty.

Additional royalty payments were made at Manoharpur mine, as iron ore was graded at the highest grade and at Nandini mines on rejected limestone chips that were not suitable for iron making.

Meanwhile, Government of Odisha and Government of Jharkhand demanded compensation on account of mining beyond quantity permitted under Environmental Clearance/ Consent to operate by the Iron ore and Limestone mines under Raw Material Division.

Delay in surrender of excess Railway land at Bolani at Meghahatuburu mines led to avoidable expenditure, said the report.

Alongside, there was 41 per cent shortfall in statutory manpower against the requirement in mines.

Pertaining to safety and environment management in SAIL, the audit report examinations in the period under review, stated that SAIL Safety Organisation did not develop any plan or frame timeline to implement its recommendations.

Out of 686 recommendations, only 258 were yet to be complied.

Rupture in pipelines in Pump House at Bhilai Steel Plant (BSP) led to fall in water pressure and Blast Furnace Gas spread into Pump House causing death of six persons.

Laxity in taking safety measures and unsafe practice of doing DeBlanking job of CO Gas Line on charged pipelines caused accident at BSP where 14 people died.

 

There were less number of Safety Officers posted in plants than the statutory requirement.

Non-disposal of fly ash and slag dump and non-setting up of sewage treatment plant led to delay in issue of EC in absence of which work for Sinter Plant and SMS-I packages at Bokaro Steel Plant was stopped.

Carbon dioxide emission in SAIL was higher than international standards as well as Tata Steel, the country’s oldest steel producer.

Delay in completion of air pollution control system led to flaring up of gases in the environment.

Average Specific Energy Consumption in SAIL was more than the world average as well as Tata Steel and state-owned Rashtriya Ispat Nigam Limited, said the audit report.