[Ferro-Alloys.com] Low capacity utilization of two subsidiaries of State-owned IDCOL (Industrial Development Corporation of Odisha Limited) has resulted in production loss of `134 crore during 2008-2013.

The pig iron plant of IDCOL, Kalinga Iron Works Limited (IKIWL), has an annual installed capacity of 2.20 lakh tonnes while IDCOL Ferrochrome and Alloys Limited (IFCAL) has the capacity to produce 20,000 tonnes of high carbon ferro chrome (HC-FeCr).

“During 2008-2013, IKIWL’s plant ran for 58,275 hours in 53 months but remained idle for seven months from April to October in 2011. Net loss of contribution during this period was worked out to `97.27 crore,” stated the latest audit report of the Comptroller and Auditor General.

Despite availability of plant and required inputs for production, IKIWL plant utilization was 37 per cent in 14 months when there was positive contribution. Had the plant been utilized to normative budgeted level, the company could have earned `7.9 crore for additional production of 72,086 tonnes of pig iron, the report stated.

Under utilization of IFCAL plant during the same period had resulted in a loss of production of 8973 tonnes of HCFeCr and the consequential loss to the company was `21.81 crore, the audit said.

While the management attributed the shortfall in production to the plant and machinery being idle due to depressed market condition, the audit noted that the plant was shut down for over 5000 hours for repair and maintenance, power failure and shortage of raw materials.

Even as excess consumption of iron ore by IKIWL plant incurred additional expenditure of `19.10 crore to the company, the management did not bother to analyze factors responsible for more consumption of raw materials.

The audit further noticed that the company sustained loss of ` two crore due to non-disposal of iron ore fines generated during the process in time. Open stacking of iron ore fines for long period resulted in quality degradation.

The company sustained a loss of about `13 crore due to excess production of pig iron scrap which fetches lower price over normal grade pig iron. The excess production was mainly due to lack of synchronization of production process with process of conversion, the report stated.

Excess consumption of electricity and coke by the plant and machinery of two IDCOL subsidiaries also cost them dearly.

Infrastructural bottlenecks and lack of monitoring resulted in higher cost of production and low productivity, the report remarked.

• [Editor:Yueleilei]