OMC Lost Opportunity To Earn Rs 1838.98 Crore Revenue: CAG

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Bhubaneswar: The CAG report which was tabled in the Odisha assembly on March 26 has said that the Odisha Mining Corporation (OMC), a state-run corporation, lost an opportunity to earn revenue of Rs 1,838.98 crore as it could not achieve the targeted production of ores during 2012-17, despite having set a low target.

The OMC had to fix its production target on the lower side due to non-availability of the required statutory clearances in time, the Comptroller and Auditor Generals’ report tabled in the state assembly said yesterday.

The failure to achieve the targeted production of ores resulted in a shortfall in the production of 114.45 lakh metric tonne of iron ore and 2.70 lakh metric tonne of chrome ore during 2012-2017, said the CAG report on public sector undertakings for the year ended March 2017.

“Consequently, the OMC lost an opportunity to earn revenue of Rs 1,838.98 crore during the period,” it said.

During 2012-17, there was a shortage in the closing stock of iron ore and chrome ore of 5.21 lakh metric tonne valued at Rs 146.01 crore, beyond the prescribed norm, the report said.

The CAG report further said that OMC incurred avoidable expenditure of Rs 138.63 crore due to non-segregation of natural iron ore fines from the crushed iron ore fines.

Delayed action to obtain forest clearance for mining purpose resulted in shortage of space for storing of ores in separate stacks, it said.

Storage of ores in dump instead of separate stacks attracted higher rates of royalty payable to the central government, the report said.

Consequently, the OMC incurred extra expenditure of Rs 110.79 crore towards royalty, the CAG said.

Noting that the OMC failed to achieve the targeted sales in any of the years during 2012-17, it said the corporation could not recover royalty of Rs 37.28 crore from the buyers due to absence of suitable provision in the sales contract.

The OMC also failed to install an iron ore handling plant, infrastructure facility and a mechanical evaluation system in its three major operating mines.

Due to non-completion of the project, envisaged benefit of Rs 1189.97 crore per annum from two out of three projects could not be achieved, the CAG said.

Stating that the OMC had not prepared long term corporate plan, vision and mission statements as required under corporate governance manual of Odisha Government, the CAG said in the absence of any long term corporate pan, the OMC could not develop strategies to achieve its objectives.

Out of 34 mining leases, 26 were inoperative. Out of 26 inoperative mines, the OMC did not commence any mining operations in eight mines since inception, it said.

“Non-operation of mines resulted in unruitful expenditure of Rs 57.26 crore towards dead rent and watch ward expenses. Further, OMC retained four mines which did not have adequate ore reserves and incurred avoidable expenditure of Rs 112.85 crore,” it said.

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