Audit Reports
Commercial
Report No. 10 of 2015 - Performace Audit of Capacity Expansion of Rashtriya Ispat Nigam Limited, Union Government, Ministry of Steel
Overview
Rashtriya Ispat Nigam Limited (RINL), the first shore based Integrated Steel Plant in the country was incorporated on 18 February 1982 with an installed capacity of 3 million tonne per annum (MTPA) with the main objective of production and sale of iron and steel products.It commenced full-fledged operations from 1992-93. RINL has been making profit over the last 12 years and earned profit after tax of RS 366.45 crore on an income of RS 13,431 crore in 2013-14whileoperatingfour captive mines at MadharamJaggayyapet,GarbhamandNellimaiia, all situated in Andhra Pradesh and Telangana to meet its requirement of raw materials i.e. dolomite, limestone, manganese and sand.
It has a Long Term Contract Agreement (LTA) with National Mineral Development Corporation (NMDC) Limited for supply of iron ore. RINL planned (2004) capacity expansion of installed capacity from 3 MTPA to 6.3 MTPA in two stages i.e. Stage-I and Stage-II. We conducted performance audit of company's activities relating to capacity expansion covering the period, 2004-05 to 2013-14. We reviewed the activities of all the major projects of Stage-I i.e. Raw Material Handling Plant (RMHP).
Blast Furnace (BF), Sinter Plant (SP), Steel Melt Shop (SMS) and two mills of Wire Rod Mill (WRM) and Seamless Tube Mill (SLTM) and Stage-II units namely Special Bar Mill (SBM) and Structural Mill (SM). A sample of 68 contracts of value RS 13275.79 crore representing 90 per cent of total 252 contracts valuing RS 14731 crore was examined in performance audit to assess the economy, efficiency and effectiveness of planning of capacity expansion including the system of award of contracts.