CAG flags delays in project implementation by SAIL

New Delhi, Dec 18 (PTI) Government auditor CAG has pulled up steel maker SAIL for delays in project implementation, shortfall in planned production and cost escalation due of over consumption of raw materials.

The audit report of Comptroller and Auditor General of India (CAG) on 'Performance of Blast Furnaces in SAIL' for 2017-2024 was tabled in Parliament on Thursday.

A blast furnace is a key unit in the production process of a steel plant and produces hot metal which is the primary raw material for steel making.

The blast furnaces of SAIL consumed more iron ore lump than the norm mainly due to variation in the Fe (iron) content in the iron ore. Inconsistent use of pellets also contributed to the excess consumption of iron ore lump.

Overall, there was excess consumption of 0.823 million tonne of iron ore lump during 2017-22 which valued Rs 186.26 crore. SAIL plants consumed sinter (made from ore) beyond norms intermittently which led to net excess consumption of 3.023 million tonne of sinter valuing Rs 1,636.41 crore.

SAIL also consumed coal more than the norm which resulted in generation of 13.97 million tonne of Co2 gas during 2017-2024.

Consumption of coal dust injection (CDI) coal was below the target at almost all the steel plants of SAIL during 2017-2024 resulting in potential extra expenditure of Rs 6,259.25 crore.

Specific power consumption in SAIL plants was more than the norms in most of the years during 2017-24 due to non-achievement of targeted production of hot metal which led to potential avoidable expenditure of Rs 310.48 crore during 2017-2024.

On the operational performance of the blast furnaces, the audit report said SAIL could produce only 126.15 MT of hot metal during 2017-2024 against the planned production of 140.88 MT as per Annual Business Perspective and 130.96 MT as per the MoU with the Ministry of Steel.

Capital repairs of blast furnaces were not completed within time which could not ensure synchronized planned shutdowns of blast furnaces and thereby avoid deferment of capital repairs.

Out of total 8,90,694 available hours for plant operation, blast furnaces were utilised for 8,20,969 hours and remained off blast for 8 per cent of the available hours on account of unplanned shutdowns during 2017-2024 mainly due to shortage of raw materials, poor offtake of hot metal by steel melting shops, technical and other miscellaneous issues.

This resulted in inability to produce 6.99 MT of hot metal and inability to gain potential contribution margin of Rs 7,986.97 crore during 2017-24.

Norms for all techno-economic parameters for all blast furnaces at the steel plants were also not fixed.

There were capacity imbalances and considerable delays in implementation of projects aimed at addressing the imbalance between hot metal and crude steel capacities at Rourkela and Bokaro Steel Plants.

Project for installation of 4th Slab Caster and setting up of Steel Melting Shop-III at Rourkela Steel Plant and that for a new sinter plant and modernisation of steel melting shop-I at Bokaro Steel Plant were delayed leading to potential loss of envisaged annual savings of Rs 1,172.94 crore.

SAIL plants in Bhilai, Rourkela, and Durgapur had implemented all the recommendations of safety audits.

Bokaro complied with 30 out of 40 recommendations and IISCO complied with 83 out of 84 recommendations, leaving key issues like conducting test of pressure relieve valves of pressure vessels, fluorescent signs in cable galleries, non-working of fire detection alarm etc non-complied. PTI ABI ABI ANU ANU