CBI to probe into iron-ore export scam

14 October 2011

biswabrata goswami
HALDIA, 14 OCT: The Central Bureau of Investigation is all set to begin a probe into the alleged iron-ore export scam through various ports, including Haldia, in which miners use the railways for sending their export consignments to the ports as meant for domestic consumption.
Last year, a CBI team had grilled some port officials of Haldia Dock Complex (HDC) to find out whether the port had allotted plots for storing iron-ore inside the port premises. “If land is allotted for storing iron-ore inside the port premise, it will be treated as legal consignment. But no plots were allotted for the past four years till the probe began, due to which the Haldia port had been incurring losses worth Rs 20 crore annually,” a senior port official told The Statesman.
This time, investigations conducted by various agencies, including railways, Customs and Excise, have revealed a massive scam by many miners cheating railways to the tune of a few thousand crore rupees by passing off export consignments of ore as meant for domestic consumption.
By declaring the consignments as meant for domestic use, the miner are enjoying huge subsidy and thus they are paying only one-sixth of what they owe to the railways as freight charges.
Alarmed by the railway freight scam, the Central Vigilance Commission (CVC) has already instructed the CBI to conduct a thorough probe into the matter. It has also asked the CBI to conduct an investigation whether ports are involved in the massive scam, a senior port official said.
According to a mine department official, hundreds of iron-ore crushing units have come up in Orissa and Jharkhand in the past few years. These companies and traders are primarily engaged in export of iron-ore through the ports along the east coast, resulting in export of 9.05 million tons at Paradwip during 2004-05 ~ an increase of 68 per cent ~ and about 4.97 million tons at Haldia, an increase of 33 per cent than the previous year.
“As the port did not provide land for storing iron-ore, the agents dumped these substances in private store-houses outside the port which were later exported illegally,” a port official alleged.
In another part of the well-organised conspiracy, one company avoided paying railways over Rs 750 crore in over three years, by exporting through the Haldia port.
Sources said iron-ore from the mines in Orissa and Jharkhand is primarily exported through Haldia, Vizag, Paradwip and Gangavaram ports. Iron-ore miners move ore from mines for exporting, but show them as meant for domestic consumption, including for their captive units. The railway freight charge for domestic use is only one-sixth of the charge for export.
South-eastern Railway zone in 2010-11 earned Rs 8,187 crore from freight traffic, of which Rs 5,135 crore was from iron-ore transportation. “And this was after they billed most of it for domestic consumption,” a senior official said.