MEMORANDUM OF UNDERSTANDING

 

 

 

BETWEEN, the Chhattisgarh State Industries Development Corporation (CSIDC) which is the Investment Promotion Agency of the Government of Chhattisgarh and Bharat Aluminium Company Ltd. (BALCO) with its works in Korba in the State of Chhattisgarh;

 

This Memorandum of Understanding (MOU) is made on this 29th day of May, 2002 at Chennai between CSIDC (hereinafter referred to as the ‘Corporation’ which expression shall, unless repugnant to the context or the meaning thereof include its successors and assigns) of the FIRST PART;

 

AND

 

Bharat Aluminium Company (hereinafter referred to as ‘BALCO’ which expression shall unless repugnant to the context or the meaning thereof include its successors and assigns) of the OTHER PART.

 

AND WHEREAS, BALCO is desirous of expanding its Aluminium Smelter Complex at Korba from its existing capacity of ONE lac tonnes per annum to FOUR lac tonnes per annum with associated increases in Bauxite mining facilities and Alumina as well as of installing a 600 MW Captive Power Plant with an investment of  approximately Rs. 6000 (six thousand) crores. 

 

WHEREAS, the Corporation acting on behalf of the Government of Chhattisgarh agrees to provide all help, prevailing incentives and facilitate clearances necessary for aforesaid Projects in the State of Chhattisgarh consistent with the various Constitutional and statutory provisions relating to the area of the said Projects, on the Corporation’s initiative as well as through the intervention of the State Investment Promotion Board under the Chhattisgarh Investment Promotion Act, 2002 (hereinafter referred to as the ‘ACT’).

 

NOW THEREFORE, in consideration of the foregoing and all other related factors, the Corporation and BALCO have agreed to do and hereby execute this MOU in order to enable such a large investment in the State of Chhattisgarh and for the aforesaid the Parties hereto have agreed upon the terms, assurances, obligations and commitments as set out herein below:-

 

  1. The Corporation shall provide all necessary assistance in procuring land for the proposed Projects in Korba, including additional land for Coal handling and ash and mud disposal facility for the Captive Power Plant and at the Mining locations.

 

  1. The Corporation shall initiate all necessary steps for the grant of expeditious approvals under the purview of the State Government for the speedy implementation of the Projects. Specifically, the Corporation shall assist in obtaining clearances from the State Investment Promotion Board within the time limits for each such clearance set out under the provisions of the ACT in respect of approvals from the relevant agencies such as the State Environment Protection Board, the Chhattisgarh State Electricity Board, other Departments and authorities under the control of the State Government.

 

  1. The Corporation shall facilitate permission from the appropriate authority under the State Government for optimal drawal of water from viable sources for operation of the aforesaid Projects at prevailing rates – specifically, it is understood that subject to a joint assessment, within three months, of actual requirements an additional requirement of approximately 45 (forty-five) MCM of water would be required annually from the Hasdeo barrage at Darri in Korba district.

 

  1. The status and progress of implementation of the Projects shall be monitored on a continuing basis, at the level of the State Investment Promotion Board or any other empowered authority, and at such frequency as may be mutually agreed, in terms of the provisions of the ACT.

 

  1. The Corporation shall take immediate steps to facilitate land acquisition and other requirements for the rehabilitation of the Project affected persons at the Boda Daldali mines in Kawardha district and at the Mainpat mines in Sarguja district so that mining activity can commence and progress in an unhindered manner.

 

  1. The Corporation shall assist in the assured sourcing of Bauxite from mines with in the State of Chhattisgarh consistent with the viability of and cost effectiveness for the Project.

 

  1. The Corporation shall ensure that all incentives available to investments of the scale envisaged under this MOU are expeditiously granted by the appropriate authorities for the Projects – specifically, it is understood that such incentives shall relate to;
    1. Waiver of Electricity Duty on consumption of electricity for a period of 15 years for industries from the date of commencement of production by such units which is already provided for in terms of the industrial policy of the State Government. In so far as the distribution of electricity from the proposed Captive Power Plant is concerned, the issue of waiver of electricity duty shall be considered as per the Captive Power Plants’ policy of the State Government.
    2. Exemption from Entry Tax in respect of capital goods and raw materials etc. for the proposed Projects. The industrial policy of the State Government already provides for such exemptions.
    3. Consistent with State Revenues, rationalization of Sales Tax structure so as to enable manufacture of products under the proposed Projects to become competitive vis a vis these products manufactured outside the State.
    4. Waiver of stamp duty and registration fees in connection with the implementation of the Projects.

 

  1. Consistent with the State Government’s policy on Captive Power Plants, Corporation shall assist in obtaining expeditiously, all relevant approvals from the CSEB and other competent authorities, so as to enable BALCO to set up the Captive Power Plant in terms of this MOU.

 

  1. The Corporation shall assist in obtaining from the State Investment Promotion Board, the recommendations of the State Government to be forwarded to the Central Government for the grant of mining leases that may be required at any time in future, for augmenting the long-term requirements of raw materials for the Project. Such recommendations shall be facilitated with in the time limits set out under the provisions of the ACT.

 

  1. BALCO will initiate all necessary steps to implement the Projects under the MOU and with a view to contribute to the industrial development and economic growth of Chhattisgarh, BALCO shall help, assist and where so required, guide the Corporation or any designated agency of the State Government in developing an ‘Aluminium Industrial Park’ for down-stream aluminium based industrial units in Chhattisgarh.

 

FOR witness whereof the Parties hereto have set their hands to this MOU on this day of 29th May, 2002.

 

SIGNED AND DECLARED BY:

 

1. For CSIDC

( A Government of Chhattisgarh Undertaking )

 

 

(Dr. P. Raghavan)

Managing Director &

Principal Secretary to Govt. of Chhattisgarh                              ……………………...

 

2. For BALCO

 

 

(C.V. Krishnan)

Managing Director, BALCO                                               ……………………………...

 

 

WITNESSES:

                                    1…………………………                 2…………………