Orissa cancels IDCOL bids

The Orissa government has canceled all the three bids received by Industrial Development Corporation of Orissa Limited (Idcol) for the development of Tangarapada chromite ore mines in the joint venture.

It has also allowed the state owned company to take up exploration and development of chrome ore at Tangarapada in dhenkanal district in partnership with the Orissa Mining Corporation (OMC). The government’s action follows the recommendation of the High Power Technical Committee constituted by Idcol to evaluate the bids.

“The government has canceled all the three bids invited for the development of chrome ore at Tangarapada. Idcol has been allowed to take up exploration work and mining of ore in JV with OMC”, A P Padhi, commissioner-secretary, industries department told Business Standard.

The committee in its recommendation to the government had stated that Idcol has achieved fiscal turn around and can invest about Rs15 to 20 crore required for development of the Tangarapada chromite mines. It strongly argued that value addition will be more if the company develops the mining in partnership with OMC.

Citing the offer of VISA Steel, the committee stated that the company offered Rs 7000 per tonne of chrome ore having 48 percent chrome content. However, if additional Rs 2000 crore per tonne will be spent on beneficiation of ore, it can be sold at Rs 17,000 per tonne giving a profit of about Rs 8000 per tonne which will be beneficial for the state.

Sources said, the revenue flow from the joint venture proposal with a private company by way of license fee, in the present market scenario will be very meager compared to the surplus that will accrue to Idcol from sale of steel and high carbon ferro chrome (HCFC). Besides, Idcol also needs chrome ore for captive consumption by its ferro chrome manufacturing division IDCOL Ferro Chrome and Alloys Limited (IFCAL) at Jajpur Road.

This apart, Idcol plans to take up beneficiation of chrome ore to export the material which has a booming market internationally. Since the export price is more than $700 per tonne, the company has chalked out plans to expand its beneficiation capacity to 15,000 tonne from 2000 to 3000 tonne at present.

It may be noted that offers for the development of Tangarapada chromite deposit in the joint venture were received from 4 parties namely Tata Iron and Steel Company Limited (Tisco), Jindal Strips Limited, Jindal Steel and Power Limited and Visa Industries Limited.

However, before the opening of the sealed offers Jindal Steel and Power withdrew its offer. The technical bids of the three other parties were opened by the technical committee in the presence of the respective parties on 9 December 2002.While Jindal Strips bid was accepted and the bids of the other two applicants were rejected.

VISA Industries and Tisco moved the High Court against this decision and the High Court held that the technical bids of VISA Industries and Tisco should not have been rejected without proper evaluation in terms of eligibility conditions.