JOIN USRaising contracts by Reddy aide unearthed
Raising contracts is a practice in the mining industry, where a lease holder enters into a contract with another firm to mine on their behalf.
The Lokayukta, in his 2008 report, declared the practice illegal, and his opinion was seconded by Advocate General Ashok Haranahalli to the State government.
The documents, unearthed by Dharwad-based NGO Samaj Parivartana Samudaya (SPS), showed that two firms represented by B V Srinivasa Reddy had entered into raising contracts with two lease holders: Mehboob Transport and Trident Minerals.
Trident Minerals
Srinivasa Reddy is the Managing Director of Obulapuram Mining Company, an Andhra Pradesh-based firm that is owned by Janardhana Reddy and his brothers. According to these documents, which is also in the possession of CBI , Trident Minerals has entered into two contracts -- one with Sri Minerals for extraction of iron ore, and another with Sri Basaveshwara Minerals for sale of the ore. Both companies are represented by Srinivasa Reddy.
The contracts, signed in January 2009, enabled Sri Minerals to extract a minimum of 10 lakh metric tonne per annum(mtpa) from the leased mine at Sandur in Bellary. In turn, Trident sold 50 pc of the ore to Sri Basaveshwara minerals at Rs 600 per tonne, and the remaining 50 pc at Rs 500 per tonne. In comparison, the export price has fluctuated between 7 times (Rs 4000 per tonne) to 14 times (Rs 8000 per tonne) the selling price since the contract was signed.
Mehboob Transport
Sri Minerals has also entered into a contract to extract iron ore with Mehboob Transport Company from their mines in Vittalpura village of Sandur Taluk. In this agreement, Sri Minerals is paid to extract at least 10 lakh mtpa for a payment of Rs 250 for every tonne.
S R Hiremath from SPS says that these documents indicate the involvement of political bigwigs in illegal mining."These must be investigated further and the truth should come out", he added.
Sources in the CBI also confirmed to Deccan Herald that besides these two documents, it was also in possession of more such ones. "We have gathered tonnes of raising contracts during our raids, and are currently verifying the details", the sources said.
What Lokayukta report says:
Since the arrangement under “Raising Contract” is literally a transfer of lease without the permission of the Government, it is opposed to law. In all such cases, the original leases should be terminated. The next report will follow regarding irregularities committed by concerned officers in this regard.