Government-run Steel Authority of India Limited (SAIL) consumed imported coal more than permitted levels between 2016 and 2023, resulting in additional expenditure of $290 million, the national auditor, Comptroller and Auditor General (CAG), said in a report titled, ‘Inventory Management in SAIL’ on Thursday, July 31.
CAG also flagged that SAIL had not fixed any benchmark for inventory carrying cost per metric ton (mt) of raw material, semi-finished material and finished goods.
This happened despite the fact that, on an average, SAIL had an inventory of $2.47 billion during 2016-17 to 2022-23, constituting about 67 percent of its current assets, the CAG report said.
"Higher consumption of imported coal, which was costlier than domestic coal, resulted in potential additional expenditure,” CAG said.
SAIL failed to maintain stock levels of raw materials like iron ore, coke, and sinter, due to which the blast furnace was put under an 'off-blast' state, resulting in the inability to produce hot metal of 932,000 mt and to earn potential revenue of $140 million at Rourkela, Bokaro, and Durgapur steel mills, as per the report.
The CAG report has been placed before the Indian Parliament, as required by the CAG as per rules relating to government-owned companies.
