Ranchi, July 24: Jindal Steel & Power Ltd (JSPL) is incurring losses to the tune of Rs 25-30 crore every month mainly due to prolonged delays in getting mines in Jharkhand, said company chairman Naveen Jindal, the candid admission from one of the leading industrialists with stakes in the state raising serious questions on the government's repeated claims about speedy clearances and ease of doing business here.
A visibly upset Naveen, speaking to mediapersons on the sidelines of a conference in capital Ranchi yesterday, further said he felt, in hindsight, that it was a mistake on his part to rush into a host of projects in the state, putting his company under financial constraints.
JSPL, one of the first companies to have signed an MoU with the state in mid-2000, has been able to set up only a 1.6MTPA wire and rod mill, as against a proposed 6MTPA integrated steel plant, at Partaru. Two other major projects of the company - a 5MTPA greenfield steel mill at Asanboni near Jamshedpur for which the MoU was signed in 2005; and a power plant in Godda, the foundation of which was laid by President Pranab Mukherjee in 2013 - have proved to be a non-starter.
Naveen said the company was somehow runing the wire and rod mill in Patratu (Ramgarh) by importing semi-processed steel from its Chhattisgarh plant.
"We are operating the mill in Patratu for the past few years. But so far, we don't have an operating iron ore mines in the state. We bring in semi-processed steel from Chhattisgarh, which is a costly proposition for us and causing losses of around Rs 25-30 crore every month. There is a problem of importing raw materials in this landlocked state. We cannot afford to sell our steel at higher prices when the industry here is facing a strong competition from China," said the JSPL chief.
He rued that the inordinate delays in getting clearances for the iron ore mines at Jeraldaburu in West Singhbhum and de-allocation of coal blocks at Jitpur and Amarkonda-Murgadangal (in the wake of the coal scam) had badly jeopardised JSPL projects in the state.
"We were much serious about our projects, but things went haywire. While clearances are pending for the iron ore mining, we lost the coal blocks given to us in Jharkhand. Now, CBI is investigating the cases," said Jindal, a former Congress MP, cursing himself for the decisions.
Obviously Jindals are not the only sufferers as the likes of ArcelorMittal, among others, have been unable to come up with their projects on the ground in Jharkhand, but that is no consolation. "A corporate house keeps at stake all its financial resources when it comes up with a new project. But now I feel It was a mistake on my part to rush into the projects as a young entrepreneur," he said.
Though Naveen's no-holds-barred conversation on the problems being faced by the corporate majors in setting up plants in the state may not go down well with the powers that be, he added that government servants, particularly bureaucrats, were good and supportive in Jharkhand compared to those in Odisha and other states. "But rampant red tapism leaves many a question unanswered especially on part of the government," he added.
