PANJIM: The affidavit by Goa Foundation in the PIL on illegal mining that is likely to come up Wednesday referring to raising contractors said, “As the case of Badruddin Mavani has shown, eventually powerful actors make deals with the owners in which 95 per cent of the income of the mine proceeds will be with the raising contractors or usurpers of the lease while 5 per cent is given to the original lease owners.”
Stating that if the lease owner is unable to mine the lease, it must be returned to the state government which can then auction it to realise its true value, the affidavit argued that the original concessions were granted to individuals for a pittance and almost all raising contractors are large companies such as Sesa Goa (Vedanta) or Fomento or Chowgules “…which are able thus, through a raising contract, given access to a lease
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illegitimately and almost without any cost. This is a perversion of the law and a wholesale subversion of the MMDR Act, completely unconstitutional and contrary to the objectives of the MMDR Act and the Abolition Act of 1987.”
Giving details the Goa Foundation rejoinder pointed out: During 2010-11, Sesa Goa exported 18.1 MT iron ore (Pg 3 of Sesa Annual Report) and declared a pre-tax profit of Rs 5559.69 crore (Page 109). During 2011-12, it exported 16 MT (Pg 3) and declared a pre-tax profit of Rs 3129.15 crore (Page 109). Thus in the last two years it made a profit of Rs 8688.84 crore exporting 27.6 MT.
The Annual report at Pg 17 mentions that 98% of these profits came from iron ore, 1.5% from Pig Iron and 0.5% from met coke. Annual report at Pg 20 also states that of this 34.1 MT, almost 81% or 27.6 MT was of Goa origin, 14% or 4.8 MT from Karnataka and 5% or 1.7 MT from Orissa.
“Thus it can be fairly estimated that in the last two years, Rs 6800 crore was earned by just one company, Sesa Goa, from Goa iron ore assets leased to them “free of cost” by Goa government,” it argued adding “Once mining starts, Sesa Goa may be seen profiting Rs 4000 crore from the iron ore assets leased to them for free by Goa government.”
Stating that normally a 14% return on investment is considered as good profit for an effortless and risk free business. “A profit of Rs 100 crores/year would be commensurate with the investment of Sesa Goa in Goa’s iron ore mining. Thus a profit of Rs 6800 crore earned in the last two years was a “windfall” and was earned only because the leases were given free of cost,” and that if there had been an auction, Sesa Goa would have definitely needed to pay a high price for the iron ore leases.
“Thus on account of “free of cost” leasing iron ore mines to Sesa Goa, the Goa government is estimated to have lost over Rs 6000 crore in the last two years. Since the lease is for 20-years, the loss to Goa government could well cross Rs 60,000 crore,” the rejoinder states, comparing it to the Rs 800 crore “Stamp Duty” that Goa government will get from registering 336 lease deeds.
“The annual iron ore production/ exports in the state of Goa is thrice that of Sesa Goa. While Sesa works 27 Deemed Leases, there were 336 working and non-working deemed leases in Goa,” the rejoinder states.
