Key industrialists have come out in support of West Bengal chief minister Buddhadeb Bhattacharjee, saying the setback in Nandigram is likely to be temporary and that they don’t see it having a major impact on the industrialization in the state.
But with the CM forced to re-examine the state’s land-acquisition policy following a police firing that left 14 casualties in Nandigram, 160km from here, it is unclear how the government will move ahead with key projects.
So far, Bhattacharjee insists that the disputed chemicals special economic zone (SEZ) will be relocated to Haldia. But Haldia has already been earmarked to house another multi-product SEZ.
“We will have to make do with what we get,” said Sabyasachi Sen, principal secretary for commerce and industry, when asked by Mint if Haldia can accommodate two SEZs, including one that was slated to evolve into a petroleum, chemicals and petrochemicals investment region.
Refusing to get into a specific discussion about land availability in Haldia, Sen said, “We have to get the local consensus first for any project before we can make a survey on the land availability.” He also declined to comment on whether squeezing two SEZs in Haldia would have an impact on the size of investments that were slated to come.
But investors already appear to be scaling back their plans. One of them is Pawan Ruia, chairman of Ruia Group. Ruia had drawn up a Rs3,000 crore investment plan there for ship-breaking, repair and building project, coupled with a thermal power station and a steel plant that would have involved 2,000 acres of land.
“We will probably constrain our project to just ship-making,” Ruia told Mint. He is now banking on the 200-250 acres available with the Kolkata Port Trust for a Rs1,500 crore ship-building project. But Ruia also maintains that the uproar over Nandigram will die out soon. It is a sentiment echoed by Debasis Sengupta, MD, ICICI-West Bengal Infrastructure Development Corp.
The biggest impact of the Nandigram decision will be on Indonesia’s Salim Group, which had drawn up major plans, including the development of the controversial SEZ. The Salim Group couldn’t be reached for comment.
Venugopal Dhoot, chairman of the Videocon Group, said there would be no problem if investors go about acquiring land on their own, in direct negotiation with farmers, instead of involving the government.
In Siliguri, a district in northern part of Bengal, Videocon Realty and Infrastructure is in the process of acquiring 1,080 acres for a multi- product SEZ as part of a proposal to invest Rs2,000 crore in three SEZs in the state.
While Dhoot is not sure about the fate of his other two projects, he too is confident that Nandigram will cause only a short-term setback.
“Bhattacharjee has been very pragmatic in his industrialization process, giving the right kind of incentives,” he said. “I do not think the process can be reversed.”
While that remains to be seen, the government is now scrambling to figure out its land policy.
The Union ministries of commerce and petroleum have indicated that new policies will advice state governments to steer clear of land acquisition. However, the Bengal government is not so sure it will work.
“Land holdings in West Bengal are too fragmented,” said Sen, with much of the land jointly owned by several parties. Pointing to the experience at Singur, where Tata Motors is setting up a car factory, he said: “To acquire about 1,000 acres, we had to issue about 10,000 cheques.” Sen said he doesn’t think that individual investors will have the capability or patience to deal with so many people, adding that he expects the state will have to remain involved in the acquisition process.
Still, “we have made a beginning with the Jindal (Jindal Steel Works Ltd) steel project, where the investors will be acquiring about 500 acres on their own”, he said. Here too, the bulk of the land, about 2,000 acres, is being provided by the government.
All the talk of direct land acquisition by investors has thrown up another contentious issue. So far, the West Bengal Industrial Development Corp. has been acquiring the land and giving it out on a long-term lease to investors. The state government is still not comfortable allowing investors to have complete ownership of the land they need for their projects.