Prime Minister's trophy for steel plant overrides pollution concerns

CSE study had shown companies which bagged the award for best integrated steel plants have poor environmental performance and productivity record

Author: Sunanda Mehta, CSE
Date: Sep 17, 2012

At a glittering ceremony on August 27, Prime Minister Manmohan Singh gave away the annual trophy for the best integrated steel plant to SAIL's flagship company, Bhilai Steel Plant, in Chhattisgarh for the year 2009-10. Tata Steel Jamshedpur plant in Jharkhand had won the award the previous year. The awards were given in recognition of efforts to achieve "international standards of efficiency, quality and economy". But do these plants really make the cut? A recent study by Delhi non-profit Centre for Science and Environment (CSE) showed these plants performed poorly on the environmental front over several years, implying the awards ignored efficiency and green concerns. The awards also raise questions about the procedural rigour used for deciding on the winner.

The awards were introduced in 1992 to bring in a sense of competition among steel plants, says the Union Ministry of Steel’s website. A cash prize of Rs 2 crore is given to the recipient of the trophy. The winner is selected every year by a panel of judges based on the total performance on objective and enabling parameters, customer satisfaction and observations during plant visits.

News reports say three rounds of assessment were undertaken by a panel of judges on the basis of various evaluation criteria, including environmental parameters. The environmental criteria included “housekeeping, environment management and afforestation, efforts made towards conservation of water, safety and efforts to achieve international efficiency”. The other parameters were: peripheral and ancillary development, safety, equipment health, corporate governance, quality and economics, process responsible for marketing and customer satisfaction, efforts to remove gender bias, empowerment of women, disabled and weaker sections of society and corporate social responsibility.

The current evaluation was undertaken by a panel of judges headed by statistician Pronab Sen, principal advisor on power and energy to the Planning Commission. The panelists comprised eminent persons from the steel industry and academicians. They were: former SAIL chairperson S R Jain, former managing director of Maruti Udyog, R S S L N Bhaskarudu, former managing director of SAIL Durgapur, S K Bhattacharya, vice-chairperson of Xavier Institute of of Management and Entrepreneurship in Bengaluru, J Philip, former bank union leader K K Nair, KAP Singh who has worked with SAIL and Mittal Steel and Surya Pratap Mehrotra, professor at IIT Kanpur. Steel ministry officials and PM's trophy secretariat were also involved in the selection process. 

CSE’s Green Rating Project (GRP) survey, however, found that these two plants were highly non-compliant when it came to various environmental norms.

Inspection reports for the period 2007-2010 of the Chhattisgarh Environment Conservation Board (CECB) for the SAIL Bhilai plant repeatedly note the alarming emission levels from the sinter plants used for iron ore preparation, power plants, coke ovens (for making coke from coal), steel melting shops (for making steel) and other stacks across the plant (see 'Bhilai Steel Plant's pollution record').  The board also took cognizance of local media articles on pollution problem. 

Further, the company still continues to operate obsolete twin-hearth technology for steel making, leading to severe air pollution, says the GRP study. In the twin hearth process, two refractory lined vessels are provided where hot air is supplied and requires eight hours for steel making. This process releases thick red dust emissions.  In the latest basic oxygen furnace (BOF) process, pure oxygen is supplied and steel making time is reduced to just around 50 minutes.

Alarming levels of air emissions were observed in Bhilai Steel Plant in 2011 (CSE file photo)

Dubious claims

Further, it was found that capacity utilisation figures of SAIL Bhilai are dubious. The rating found that different steel plants have been stating different annual capacities for similar sized basic oxygen furnace or Linz Donawatiz (LD) converters used for steel making. For instance, SAIL Bhilai, for its 130 tonnes heat LD converter in steel melting shop (SMS) number 2, reports annual capacity as 0.6 million tonnes per annum (MTPA) crude steel per converter. SAIL Bokaro states 0.44 MTPA crude steel per converter for each of its 130 tonnes heat converter of its SMS number 1 unit.

On the other hand, JSW Steel states 1.33 MTPA crude steel per converter for the same 130 tonnes heat LD converter size in its SMS 1 unit in its Vijaynagar plant. It implies that SAIL Bhilai is grossly understating its capacity for LD converters. But the plant continues to claim SMS capacity utilisation rates of 120-130 per cent in recent years, as given in the annual reports of the Union Ministry of Steel.

To top it all, SAIL Bhilai, in a statement declared “unparalleled distinction of being the only steel plant in the country, public or private, to have been honored with the prestigious PM’s trophy 10 out of the 17 times it has been awarded since it was instituted.”

The Tata Steel plant at Jamshedpur, too, has received many directions and show cause notices from the Jharkhand State Pollution Control Board and the Central Pollution Control Board for heavy emissions observed from its coke batteries and sinter plants and for non-compliance with consent conditions for air and water emissions and wastewater discharge. People living around the plant have complained of numerous pollution problems.  Further, the unsystematic solid waste disposal of steel slag is also a major concern as it is dumped outside on the banks of the rivers Subarnarekha and Kharkhai.

But at the time it received the prime minister's trophy, Tata Steel had claimed that it had improved its performance “by bettering financial performance and making significant improvements in all areas of operations, such as production of hot metal and crude steel, quality assurance and customer satisfaction”.

Coke oven effluent mixed with cooling water discharged from Tata steel plant flowing in 9 Number, Bagan area housing block at Jamshedpur town (CSE file photo of 2011)

A reality check of these two plants show they are anything but world class when one evaluates their environmental sustainability practices. “Given these facts and revelations from our project, there is an urgent need for a review of the assessment process of selecting the 'best integrated steel plant' for PM’s trophy”, says Umashankar S, senior programme manager of Green Rating Project, CSE. Concerns of state pollution control boards should be taken into account. Furthermore, local community perception and safety practices and record should be given higher weightage while evaluating the steel plants, he adds.