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February 28, 2001                                       Feedback  

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Naveen Patnaik in trouble over lease to Balco

Imran Khan in Bhubaneswar

Orissa Chief Minister Naveen Patnaik is in the eye of a storm over his recent decision to lease out a mine to Balco just before the company's divestment deal was announced by the Centre.

The Biju Janata Dal-Bharatiya Janata Party coalition led by Patnaik has already admitted that it was aware of divestment in Balco before leasing out the Sasu Bohu Mali mines to the company.

The state government stated that negotiations for lease of the mine were on for the last five years and the lease was granted earlier this month.

Moreover, Patnaik said that the state government had no role in leasing the mines to Balco. Following the Centre's request, the state government just recommended leasing out the mine, as per section 17 of the Mines and Minerals Development and Regulation 1952 Act.

Patnaik told the newspersons on Monday that Union Mines Minister Sunderlal Patwa had requested the state government to lease out the mine in January this year and the recommendation was given in February.

When asked whether the government knew then about the divestment plans in Balco, the state chief secretary replied in the affirmative. The chief secretary averted a query as to how the state government leased out such a valuable mine despite knowing that its shares would be sold.

Opposition Congress leaders alleged that the Bombay-based Sterlite Industries offered Rs 5.51 billion for Balco's shares since it had information that the rich bauxite mine was leased to Balco. The others did not and offered only Rs 2 billion.

Interestingly, Patnaik said that while recommending the leasing out the mine, the state government had insisted that Balco set up an alumina plant in Orissa.

The 40 square kms mine has 30 million tons of bauxite reserves. Sources said it was not feasible to set up an independent plant since the reserves would last only for 10 years.

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