Even as the state government continues to accuse Tata Iron & Steel Company (TISCO) of unchecked deforestation around Jamshedpur, it has also locked horns with TISCO over riparian rights in the nearby Suvarnarekha river. Bihar's firebrand minister of irrigation, Jagdanand Singh, is demanding Rs 15 crore as the state's "rightful dues" from TISCO for the private sector giant's use of river water for human and industrial use in its township.

TISCO, however, rejected Singh's demand and a senior company spokesperson notes that since its establishment, TISCO had been drawing water from the river without charge. The Bihar government's demands were "virtual bullying, in contravention to the conventional practices, which have been the basis of our relations with the state government", the spokesperson added.

TISCO officials contend that tradition allows them rights to water from the Suvarnarekha and referred to a similar dispute between the West Bengal government and the Indian Iron & Steel Company (IISCO), which was settled in court with IISCO's prescriptive rights over an adjacent water source being upheld.

Singh maintains TISCO's version of legal precedent "is distorted and would do them no good". He contends that the Chandil dam was constructed on TISCO's express assurance that it would pay for water drawn from its reservoir.