Gali steel factory in profit before it begins

Hyderabad, Nov. 13: The Karnataka minister, Mr Gali Janardhan Reddy, on Friday said he had earned a profit of Rs 1,329 crore from Obulapuram mines in the last three years.

Addressing the media, Mr Reddy, who owns the controversial Obulapuram Mining Corporation, claimed that he invested the profits from Obulapuram mines in Bramhani Steels, which is to come up in Kadapa. He even took credit for not approaching any financial institution for loans for the steel factory.

In fact, this newspaper had a carried a report (‘It’s a steel: Bramhani set to mine profits pre-production’ on July 27, 2007’) on how Bramhani Steels was profiting.

The YSR government had allotted two mines to OMC besides extending the lease period of another mine till 2017. According to the balance sheet of OMC, the turnover in the last three financial years was Rs 3,570 crore out of which the profit was Rs 1,329 crore.

The former industries minister, Dr J. Geetha Reddy, had on July 26, 2007, defended the allotment of mines to OMC stating that steel factory, indeed, required raw material of iron ore.

Though the factory was supposed to start production by December 2009, the completion of the first phase would be over only by October 2010.

While submitting its requirement of iron ore, the company projected that it would require 3.2 million tonnes for the first phase, 12.32 million tonnes by 2011 for the second phase and 16 million tonnes for third phase in 2017.

But, the balance sheet shows that the company has already mined 11.5 million tonnes of iron ore in the last three years.

And Mr Janardhan Reddy could continue to mine in Obulapuram even if he does not start production in the factory since the government has not included any clause linking the mines and the steel plant.

The TD president, Mr N. Chandrababu Naidu, alleged that Mr Gali Janardhan Reddy did not invest a single paisa in the steel plant.

“I am surprised that a BJP minister like him has joined hands with a Congress MP and is doling out threats,” he said. “It’s a serious matter and all democratic forces should come together to fight the mining mafia.”