Press Esc to close
Saturday 30 August 2014
News updated at 12:07 AM IST
Weather
Max: 25.6°C
Min : 19.7°C
In Bangalore
Generally cloudy

CAG faults NMDC for Rs.746 crore revenue loss during 2007-10

New Delhi, Dec 20, 2012,(IANS):

State iron ore miner NMDC bore revenue losses of Rs.745.94 crore during 2007-10 for not revising the domestic prices of the raw material in line with prevailing market rates, India's official auditor said Thursday.

"...due to non-revision of domestic prices by the company (NMDC) in line with movement of market price, the company has suffered a revenue loss of Rs.754.94 crore during 2007-10," the Comptroller and Auditor General (CAG) said in a report tabled in parliament.

The CAG also said by extending unwarranted price reductions, National Mineral
Development Corporation (NMDC) had passed Rs.600.83 crore benefit to its customers during 2010-11.


"... not increasing the prices by full percentage in line with increase in export prices led to a loss of Rs.227.40 crore during the same period," the CAG said.

The national auditor also faulted NMDC's way of price fixation, saying the method of net realisations followed is deficient, which results in charging lower prices to domestic customers who sell their finished products at prices driven by market forces.

"As the lower iron ore prices charged by NMDC do not necessarily result in keeping the steel prices low as these are market driven, it is imperative that NMDC safeguards its financial interests and realises optimum prices for its ore," the CAG said.

NMDC exports iron ore through long-term agreements (LTA) with Japanese Steel Mills (JSM), at prices that are at par with what Australian and Brazilian exporters get from JSM.
LTA prices of exports formed the basis for determining the domestic prices for LTA with domestic customers, the CAG said, adding that 95 per cent of NMDC's sales came from LTA and the rest were spot sales during 2005-12.

"Sales to domestic customers through LTA accounted for 84 per cent of its sales," the CAG said. State-run Rashtriya Ispat Nigam and private sector firms like JSW Steel and Essar Steels are NMDC's major domestic customers.

NMDC sold 27.3 million tonnes iron ore valued at Rs.11,167.56 crore during 2011-12.
Regarding shortfal in iron ore production, the CAG observed that though NMDC achieved a capacity of 32 million tonnes in 2007-08 itself, it has generally been setting its annual production targets below its capacity.

"Its actual production ranged between 23 and 30 million tonnes during 2007-12, which was linked to inadequate evacuation facilities," the government auditor said.

Go to Top

Photo Gallery
Union Railway Minister Sadananda Gowda during a visit to Ernakulam railway station in Kochi ...

Union Railway Minister Sadananda Gowda during a visit to Ernakulam railway station in Kochi ...

Bomb Squad members checking a suspected bag found at Bandra Station in Mumbai ...

Bomb Squad members checking a suspected bag found at Bandra Station in Mumbai ...

Red Cross workers walk through an Ebola hit area  in Monrovia, Liberia ...

Red Cross workers walk through an Ebola hit area in Monrovia, Liberia ...

Models take part in awareness campaign 'Save Ganga and Green India' in Bhopal ...

Models take part in awareness campaign 'Save Ganga and Green India' in Bhopal ...

Siddaramiah presenting kit to a beneficiary  during launch of 'Pradhan Mantri Jan-Dhan Yojana' ...

Siddaramiah presenting kit to a beneficiary during launch of 'Pradhan Mantri Jan-Dhan Yojana' ...

Ganesh idol made of dry fruits ahead of Ganesh Chaturthi festival in Mumbai ...

Ganesh idol made of dry fruits ahead of Ganesh Chaturthi festival in Mumbai ...

A young girl viewing Ganesh statues for sale on the eve of the Ganesh Chaturthi in Jaipur ...

A young girl viewing Ganesh statues for sale on the eve of the Ganesh Chaturthi in Jaipur ...

Team owners Sachin Tendulkar and Ranbir Kapoor during the launch of Indian Super League ...

Team owners Sachin Tendulkar and Ranbir Kapoor during the launch of Indian Super League ...

John Abraham, signs a football during the launch of the Indian Super League, in Mumbai ...

John Abraham, signs a football during the launch of the Indian Super League, in Mumbai ...

Founding chairperson Nita Ambani at the launch of the Indian Super League in Mumbai ...

Founding chairperson Nita Ambani at the launch of the Indian Super League in Mumbai ...

Copyright 2014, The Printers (Mysore) Private Ltd., 75, M.G Road, Post Box 5331, Bangalore - 560001
Tel: +91 (80) 25880000 Fax No. +91 (80) 25880523