Private security personnel guard the Posco site office at Kujanga block in Jagatsinghpur district. (Reuters)

New Delhi, Nov. 6: The Supreme Court today questioned the rationale adopted in awarding the controversial prospecting iron ore licence to Posco in Odisha’s Khandadhar mines, observing that the Naveen Patnaik-government had apparently treated the South Korean steel giant as a “blue-eyed boy”.

Though the searching questions were shot at Posco’s senior counsel Maninder Singh, the apex court’s barbs and opprobrium were intended and reserved for the state government.

The bench of Justice R.M. Lodha and Justice A.R. Dave expressed displeasure at the manner in which the mines were allotted to Posco because of its perceived big player status.

Drawing similarities from the game of cricket, the bench told the counsel that the state should have adopted the role of an impartial umpire rather than one, who is obsessed with a particular player or personality such as Posco.

“Is it the way of assessing competence? So bigger the player, the play must stop! These are great natural resources. Merely if someone is big, it can’t be done. Big will become bigger, the bigger will become the biggest. God help this country. How casual approach has overridden things,” Justice Lodha said.

Justice Singh contended that Posco was awarded the contract on account of its massive infrastructure, competence and ability to mobilise financial resources required for the steel project.

The court is hearing cross petitions filed by the state government, Posco and Geomin Minerals & Marketing, a mine and mineral company. On July 14, 2010, Orissa High Court set aside the government’s decision to allot iron ore licence in Sundergarh’s Khandadhar hills to Posco for its proposed steel plant as many other contenders were overlooked.

“You (state) say give it to him because he is a big player. How about others who are competent and capable? If the umpire becomes obsessed with the big player, the match is over.”

“Umpire has to see the game impartially, not get obsessed by personalities. It requires objectivity. Objectivity is something subjective and requires fairness. How can you assess the matter like this? You must explain.”

“The sum and substance is that Posco is a blue-eyed boy. Competence and merit were not evaluated. Even a small player can play a big game. Unless you give a chance how is it possible? There has to be application of mind,” the bench told the counsel.

The counsel said the state had to explain the criteria and parameters it had adopted because Posco was only a beneficiary. “I am the beneficiary. It is for the state to answer if they succeed,” the counsel said.

Later, the apex court adjourned the matter till the first week of January 2013.

In January 2009, the Odisha government had recommended to the Union government to grant prospective licence in favour of Posco in Khandadhar mines.

Geomin Minerals termed the government’s decision arbitrary and illogical and challenged the recommendation in the high court claiming that it had applied for the prospective licence for Khandadhar iron ore mines way back in 1991, much before Posco had done.

In July 2010, the high court struck down the state government’s decision to allocate the Khandadhar mines to Posco. It came down heavily on the state government for its inconsistent mining policy.

It was the second time the state government faced difficulties over granting prospective licence to the South Korean company. Before that the Odisha government had recommended Posco’s name in December 2006 for the same purpose. It was rejected by the Centre, which directed proper rehearing of all applications.

Subsequently, the state government heard all the applications and again made a similar recommendation in January 2009.