Orissa CM says backed Hindalco in the best interest of the state

Hindalco is setting up an aluminum smelter of 2.6 lakh tonnes per annum in Sambalpur district.

Written by Rahul Tripathi | Bhubaneswar,new Delhi | Published:October 18, 2013 3:16 am

Orissa Chief Minister Naveen Patnaik Thursday said he had written to Prime Minister Manmohan Singh in August 2005 to examine Hindalco’s request for the Talabira II coal block in Jharsuguda district keeping in mind the best interests of the state.

Patnaik’s statement about his role in the controversial allotment came hours after CBI sources said that the agency,while examining documents in connection with its coal blocks distribution probe,had found a letter written by him to the PMO requesting a relook at the decision to reject Hindalco’s request for the block.

The CBI had Tuesday filed an FIR in the case,accusing Kumar Mangalam Birla,chairman of the Aditya Birla group,and former coal secretary P C Parakh of criminal conspiracy in the allotment of two coal blocks in Orissa in 2005,Talabira II being one of them.

CBI sources claimed that similar requests by state governments to favour private firms in the allotment of coal blocks had been rejected but due consideration was given in Hindalco’s case.

The sources,however,said there was no immediate plan to question Patnaik in the case following the discovery of his letter.

In a statement to the press,Patnaik said the state government gives utmost importance to mineral development due to the abundant reserves of bauxite,iron ore and coal in Orissa which in turn creates employment and more revenue for the government’s development programmes.

“Since power is a major raw material for an aluminium project…we had asked the central government to examine the request of Hindalco. The state government has all along held that higher priority be given to units adding more value in our state instead of sending the raw material to some other state,” Patnaik said.

Hindalco is setting up an aluminum smelter of 2.6 lakh tonnes per annum in Sambalpur district,adjoining Jharsuguda,for which it needed a captive power plant of 900 MW capacity. And Patnaik wrote to the PM on August 17,2005,pushing Hindalco’s case for the Talabira II coal block in Jharsuguda.

In the letter,Patnaik had written that Hindalco would set up an integrated aluminum complex,which would include 1 million tonne per annum alumina refinery,a 2.6 lakh tonne per annum aluminium smelter plant as well as a 5 x 130 MW captive power plant at an aggregate investment of approximately Rs 11,000 crore.

“Power constitutes as much as 60 per cent of the production cost of aluminium. Therefore the cost of power plays a key role in the commercial viability of any aluminium project. It is in this context that the allotment of a suitable coal block in favour of Hindalco becomes critical,” he said in the letter.

The state government had also strongly supported Hindalco’s case during the 25th meeting of the screening committee of the coal ministry,held on January 10,2005,

to allot coal blocks.

Meanwhile,minister of state in the PMO,V Narayanasamy,said the Centre had nothing to hide in the case.

“As far as the government is concerned,we have made it very clear that the allocation of coal blocks have been made to public sector undertakings and also to some of the private sector on the recommendation of the state governments,” he said.

But he did not comment on allegations by former coal secretary Parakh that it was the PM who ultimately decided on the coal blocks allotment.

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