India: OMC’s Daitari Iron Ore Tender Called Off

Electrosteel Steels in spite of being Iron ore lease holder participated in the process and emerged as H1 bidder, which is against the norms of OMC.

Odisha Mining Corporation (OMC) had floated a tender on 01 Sep, 2014 for sale of sized CLO & Iron ore Fines available at Daitari region which fetched high bids. Electrosteel Steels quoted highest bids (H1 prices). Amid scarcity of raw material the lump prices went up to INR 5,101/MT in Q3 FY15 against INR 3,526/MT Q2 FY15 via this tender.

As per the stated norms of OMC any agency having Iron ore lease-hold shall not be allowed to take part in the tender. Electrosteel Steels- a Jharkhand based steelmaker, also an Iron ore mines lessee took part in the tender process & emerged as highest bidder.  The discrepancy was pointed out to OMC after technical bid was opened but instead of stopping the price bidding process it proceeded further the next day.

After being questioned over this matter OMC’s Managing Director Mr. Girish SN stated that it moved ahead with the bidding process since Electrosteel Steels had furnished a self declaration that it complied with all norms.

On the other side, raising objection to the tendering process, Kalinga Nagar Industries Association (KNIA), an umbrella body of steelmakers operating in the steel hub has urged Minister of Steel & Mines to deal with the issues immediately. Ina a memorandum to the minister, KNIA said Electrosteel Castings offers different facilities around the country including an Iron ore mine in Jharkhand and the mining lease hold alone should have rendered Electrosteel Steels- its sister concern, ineligible from participating in the bidding process.

Sources mentioned that after receiving the complaints the state run PSU-OMC, has decided to send a team to Director of Mines of Jharkhand to verify the matter & collect the relevant documents. Till then no ore will be allocated to the company & it will not be allowed to lift any stock.