Odisha industries raised Rs 52 k cr loan using NOC by IDCO !

Reported by Chinmaya Dehury

 Bhubaneswar, June 23:

In a clear case of undue favour to industries by the Odisha government, IDCO, the nodal agency for land acquisition, has irregularly issued No Objection Certificates’ (NOC) to several industries to raise thousands of crores of rupees in the form of loan from financial institutions by mortgaging the land allotted to them.

“IDCO irregularly issued ‘No Objection Certificates’ (NOC) to 26 MoU based industries for mortgaging 13846.238 acre land allotted in order to raise loans from financial institutions, even though it was not authorised to do so,” said a report of CAG, which was tabled in the state Assembly today.

As per the rules, government land is sanctioned in favour of IDCO for different industries under the provisions of OGLS Act. The acquired land and government land is leased to IDCO under Sections 31 and 32 of the OIIDC Act, 1980. IDCO, then sub leases the land to concerned industries. As government is the primary lessor and IDCO is itself a lessee, permission of the primary lessor was to be obtained in order to confer mortgage rights to the sub lessee, i.e., the industries in order to raise loans for their industrial projects on the basis of the land allotted to them, the report pointed out.

The audit report noted that on the basis of NOCs issued by IDCO, loans of Rs 52423.50 crore was sanctioned by financial institutions in case of 12 promoters of MoU based industries, for mortgage of 8489.828 acre of allotted land.

“As per information collected from these financial institutions, five out of above 12 industries have been released loan of Rs 8625.89 crore. In case of remaining 14 industries, quantum of actual loan sanctioned/ availed on mortgage of land was not made available by IDCO to Audit,” said the report.

However, in seven out of these 14 industries to whom NOC was given by IDCO, the audit noticed that the land was mortgaged with the financial institutions along with other fixed assets to avail a total loan of Rs 28214.45 crore.

In 32 Industrial Estates, IDCO also irregularly issued NOC to 736 small and medium industrial units allowing mortgaging land allotted to them during 2001-12.

“Thus, IDCO unauthorisedly issued such NOCs, thereby enabling industries to raise loans on the basis of land allotted for industrial purpose, without adequate safeguards to ensure that such capital would actually be used in the industrial projects concerned,” said Amar Patnaik, Auditor General of Odisha at a press conference here today.

Besides, IDCO irregularly conferred mortgage rights in lease deeds executed with 52 MoU based and 54 non-MoU industries while handing over of possession of 46732.894 acre land, even though such power was not vested with IDCO by the state government.