Orissa to get Rs 2,400 cr from forestland NPV

The Orissa government is likely to collect Rs 2400 crore from the deposits made towards the Net Present Value (NPV) of trees in the forest land diverted for mining and industrial use.

A major chunk of this amount, approximately about Rs 900 crore, will be contributed by the state owned Orissa Mining Corporation (OMC) which holds lease over vast areas of land for minerals like iron ore, bauxite and chromite.

As per a Supreme Court order, the lessees are required to pay the Net Present Value (NPV) of the forests for the entire lease area in case of allotment of Mining Lease (ML) and also Renewal Mining Lease (RML).

Though the order came in 2002, this was not being adhered to till the Central Empowered Committee (CEC) of the apex court pointed out this anomaly during the hearing on a case related to rampant illegal mining in the state recently.

The CEC in its interim report has recommended for collection of NPV of trees in the forest land in the entire lease area. The rate has been fixed at Rs 6 lakh per hectare.

Though the OMC is required to pay about Rs 900 crore towards the NPV, it is yet to decide on how to pay this amount.

“There are various issues involved in the matter and the board will take a final decision in the matter”, a senior OMC official told Business Standard.

Sources said, the board is expected to take a decision whether entire lease area would be retained or only the mineral bearing areas would be retained. The burden of NPV is likely to be higher in the earlier case. However, surrendering the un-prospected areas would not be easy for OMC as it would attract criticism from different quarters.

Meanwhile, the state forest and environment department is gearing up to issue notice to various companies for payment of NPV for the forest land in their control.

CEC, in its interim report submitted to the Supreme Court, has suggested for payment of NPV on the forest land identified by the District Level Committees for start of mining operation.

The public sector Mahanadi Coalfields Ltd (MCL), which was given one year time to obtain forest clearances for its mines, has been asked to deposit NPV immediately.

It may be noted, 50 percent of NPV deposited by industries would be spent by the Special Purpose Vehicles (SPVs) to be formed for the development of the local area.

OMC posted a profit before tax (PBT) of Rs 1890.22 crore on a turnover of Rs 2085 crore in 2008-09. But depositing Rs 900 crore towards NPV is expected to be a huge burden on its coffers, sources added.