Reliance Kolkata project in municipal wrangle

Reliance Kolkata project in municipal wrangle
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First Published: Mon, Jan 26 2009. 11 20 PM IST

Changing equation: The Park Circus market, which was to be rebuilt by Reliance. The Kolkata Municipal Corporation now wants the firm to promise that it will not sell farm produce in the renovated mark
Changing equation: The Park Circus market, which was to be rebuilt by Reliance. The Kolkata Municipal Corporation now wants the firm to promise that it will not sell farm produce in the renovated mark
Updated: Mon, Jan 26 2009. 11 20 PM IST
Kolkata: The plans of Reliance Industries Ltd, or RIL, to rebuild Park Circus market are still in limbo nearly two years after it won an auction to do so, as municipal authorities are yet to sign a lease agreement with the firm in the face of local protests.
The Kolkata Municipal Corporation, or KMC, now wants Reliance to promise that it will not sell farm produce in the renovated market, but the company is unwilling to do so.
Changing equation: The Park Circus market, which was to be rebuilt by Reliance. The Kolkata Municipal Corporation now wants the firm to promise that it will not sell farm produce in the renovated market. Indranil Bhoumik / Mint
The dilapidated 68-year-old market, one of the 22 owned by KMC, was put on the block for redevelopment and Reliance Retail Ltd and Reliance Engineering Associates Pvt. Ltd, both subsidiaries of Mukesh Ambani-controlled Reliance Industries, won the bidding.
At the time of the auction, KMC had said it would lease out the market for 99 years to the winning bidder, which could keep around 154,000 sq. ft for its own use and rebuild the remaining 76,000 sq. ft to rehabilitate around 400 traders in the market and house KMC’s administrative offices.
The market’s shopkeepers, who mostly sell groceries, vegetables, fish and meat, banded under the state’s main opposition Trinamool Congress party to oppose the move, fearing they would be unable to compete with Reliance Retail. The Forward Bloc party, a constituent of the ruling Left Front, also joined forces with them.
“We are insisting that they (Reliance) not sell agricultural products from the renovated Park Circus market but they aren’t willing to accept this condition,” joint municipal commissioner, development, Sahidul Islam, told Mint, adding that negotiations led by mayor Bikash Ranjan Bhattacharya are continuing.
Municipal commissioner Alapan Bandopadhyay, however, dismissed possibilities of the deal being called off.
“They (Reliance) are naturally eager to start business but I don’t think they can be said to be pushing us to return the money,” he said. Reliance had paid KMC Rs30.33 crore—the amount it had bid for control of the market—a year ago.
An emailed questionnaire on the issue sent to RIL on 21 January wasn’t answered.
Though traders led by the Trinamool Congress and the Forward Bloc have been opposing the entry of retailers and wholesalers such as Reliance and Metro Cash and Carry (India) Pvt. Ltd, the Communist Party of India (Marxist) has so far welcomed investments in the retail business.
In September, chief minister Buddhadeb Bhattacharjee personally intervened to remove obstacles for the launch of German wholesaler Metro’s 100,000 sq. ft store. But, it now seems even he is unable to build a consensus within the Left Front on giving Reliance control of the Park Circus market.
Local elected representative to KMC, Farzana Choudhury of the Communist Party of India, said: “We understand that there has been a delay which no investor would like…but at the end of the day it has to be a political decision taken by the Left Front.”
Park Circus isn’t the first KMC-owned market to be redeveloped. Three other markets—at Gariahat, Lake Market and College Street—have been rebuilt. The College Street market is being rebuilt by a private real estate developer—Bengal Shelter Housing Development Ltd—into a mall dedicated to book stores.
The civic body plans to redevelop 17 markets, Park Circus included, and the mayor even suggested floating an omnibus tender for all of them two years ago.
But the stiff political resistance to leasing out Park Circus market seems to have forced KMC to put the plan of redeveloping its markets on the back burner. Soon after Park Circus, KMC was expected to invite bids for the Entally market in central Kolkata, but there has been no action on that front.
Commissioner Bandopadhyay said the civic body was unable to find a suitable site that traders could move into while the Entally market was being rebuilt.
There was a similar stand-off between Reliance and state authorities a few months ago, when the retailer was looking to launch Reliance Fresh stores in Kolkata and its suburbs.
The state agricultural marketing board, which is controlled by the Forward Bloc, refused to grant a licence for Reliance to source farm produce from wholesale markets governed by the board. Reliance had been waiting for the licence for almost a year.
Unable to get a licence, Reliance tied up with the Keventer Group, which was licensed to buy from some agricultural marketing board-controlled markets, and started retailing fruit and vegetables through its stores in Kolkata.
The Keventer Group has since applied for 11 more licences armed with a Calcutta high court order that has asked the agricultural marketing board to process the applications within a month.
The Keventer Group had moved court alleging that the board was sitting on its application for licences for almost a year.
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First Published: Mon, Jan 26 2009. 11 20 PM IST