Three-member panel to look into problems of Kalinga Nagar units

Responding to the concerns of the industrial units operating at the Kalinga Nagar Industrial Complex (KNIC), the emerging steel hub in Orissa's Jajpur district, the Orissa government has decided to set up a three-member committee consisting of secretaries of the departments of steel & mines, industries and commerce & transport.

This committee will look into various issues raised by the units operating in the KNIC such as steep hike in prices of raw materials like iron ore and chromite, prohibitive costs of transportation of ores and unavailability of adequate raw materials to run the units.

"It has been decided to constitute a committee to look into the problems of the units operating in the Kalinga Nagar area and this committee will submit its report within a month. We had detailed discussions with the representatives of the Kalinga Nagar Industries Association (KNIA) on their problems like inadequate availability of raw materials, high ore prices and high cost of transportation of ores”, said Raghunath Mohanty, the state minister for industries and steel & mines.

Purushottam Kandoi, president, KNIA said, “We apprised the ministers and the respective departmental secretaries of the problems faced by the industries operating in the Kalinga Nagar area. Due to a steep hike in prices of ores and the prohibitive cost of ore transportation, the units have become commercially unviable.”

"Two out of 11 industrial units operating at the KINC have already been shut and the remaining units are operating at 30-50 per cent capacity. To ensure that the units run their operations normally, iron ore pricing and logistics pricing have to be streamlines”, he added.KNIA had recently suggested that the Orissa Mining Corporation (OMC) can supply 50 per cent of the ore to these industries at this fixed price and offer the balance through the e-auction mode.OMC can work out a base price of the ore based on production cost and after providing for its own margin can derive the selling price of the ore, it had pointed out.

"Non serious players are manipulating the iron ore price in the open tender adopted by OMC as a result of which, iron ore prices have risen to abnormal level making units unviable. The state government should put restriction on iron ore supplies to players outside the state and sell only 25 per cent of their production to units located outside the state and offer 75 per cent to units within the state”, Kandoi had stated earlier.

KNIA had pointed out that prices of iron ore in the Gandhamardhan sector have surged by 191 per cent while in the Daitari sector, there has been an upswing of 130 per cent in iron ore prices in the past 12 months. The price of iron ore (size 10-40 mm) of OMC for the third quarter of 2010-11, from Gandhamardan is fixed at Rs 4155 per tonne and from Daitari, at Rs 4455 per tonne. The prices of ore from these two mines for the same period of 2009-10, were Rs 1426 per tonne and Rs 1944 per tonne respectively.