Hc Blow To Posco Move

POSCO

HC blow to Posco move

Statesman News Service

BHUBANESWAR, April 16: The state government's move to provide iron ore lease by way of a special recommendation in favour of Posco has run into trouble with the Orissa High Court asking the Central government to hear all parties, including KIOCL's claims for the mines and dispose the matter preferably within three months.

A Division Bench comprising Chief Justice Mr Justice Ashok Kumar Ganguly and Mr Justice Nityananda Prusty passed the order while disposing writ petitions filed by KIOCL, a Central PSU and said it was not going into the merits of the case. Objections filed by KIOCL with the Centre earlier and any further objections that it wanted to file are to be treated as revision by the Central government and all parties before the court, Posco, state government and KIOCL, heard while disposing the matter, stated the court.

Kudremukh Iron Ore Company Limited (KIOCL) had initially filed a writ when it received a communication from the government as to why it had not set up a proposed pelltisation plant and asking it to put such plans on hold. KIOCL responded by saying that it was awaiting grant of mining lease.

The KIOCL filed objections with the Central government when the state made a special recommendation for Khandadhar mines in favour of Posco. Since KIOCL's application for the same mine was pending since long it filed objections and subsequently moved the High Court challenging the special recommendation made by the state government. Effectively now, the Centre has to hear KIOCL's contention for the mines before taking any decision on grant of mining licence. The significance of the order stems from the fact that as per procedure, there was no scope for revision or hearing at the Central government level once the state had made a special recommendation in favor of a particular company. Earlier, on 26 February, the High Court ordered the status quo on grant of prospecting licence for Khandadhar iron ore reserves after KIOCL filed the petition.

KIOCL had filed the petition on the basis of preferential rights for allotment of mining lease as it had applied since 2002 and had spent Rs 2 crore when the directorate of geology took up prospecting work.

Posco had become an intervener in the case while the state government had contended that KIOCL's application was taken into consideration as the PSU had failed to make any headway in setting up its proposed Rs 700-crore plant in the state over a period of time. It also submitted that Posco's application was forwarded to the Centre for approval as it was prepared to make a sizeable investment by setting up a steel plant.