Kolkata: The West Bengal government has come in the way of the sale of surplus land by ailing Union government-owned companies in the state, by refusing to grant permission to develop housing and commercial projects on this land in a move that is prompted by its own desire to acquire this land for industrial projects.
And the state’s land and land reforms minister Abdur Rezzak Mollah is threatening to stall even projects that are coming up on land already sold by National Textile Corp. Ltd (NTC) to developers.
Companies that have large tracts of surplus land include Bharat Process and Mechanical Engineers Ltd, National Jute Mill Corp. Ltd, Bharat Ophthalmic Glass Ltd and Cycle Corp. of India Ltd.
In a letter written on 29 June, a copy of which was released to the media, West Bengal chief minister Buddhadeb Bhattacharjee had requested Prime Minister Manmohan Singh to “take a decision that all such industrial land should be offered to the state government first, at rates at which it is possible for the state to promote industrial activities”.
Though the state government wants to acquire land from Central public sector companies, it doesn’t want to pay market rates.
“No investor will pay Rs2 crore an acre to build a factory. So, the state government can’t compete with real estate developers,” said an official of the commerce and industries department, citing the chief minister’s letter to the Prime Minister.
West Bengal has a poor track record in terms of its ability to acquire land for industrial projects. Tata Motors Ltd’s small car factory at Singur in the state had to be relocated to Gujarat after protests broke out over the alleged forcible acquisition of land by the state for the project.
The state government claims that there are thousands of acres with ailing public sector companies, which, if released, could solve to a great extent the problem of finding land for industrial projects in West Bengal.
Under state laws such as the Urban Land (Ceiling and Regulation) Act and the West Bengal Estates Acquisition Act, real estate developers need clearance of the state government to build homes and commercial complexes on industrial land.
“Land reserved for industrial use cannot be used for real estate business,” said Mollah, whose land and land reforms department has, however, granted permission in the past to companies such as Hindustan Motors Ltd and Bata India Ltd to launch real estate projects on surplus land.
Mollah’s attempt to stall ongoing projects could lead to a dust up between the state government and real estate developers, who have bought at least 150 acres from NTC since 2003.
At least three real estate developers who had bought NTC mills—Harshavardhan Neotia, chairman of Ambuja Realty Development Ltd; Rahul Saraf, managing director of Forum Projects Pvt. Ltd; and Mahendra Kumar Jalan, chairman of MKJ Developers Ltd—said they had already obtained clearance from the state government for building homes and commercial projects, and that the state government couldn’t revoke the permission already granted.
An official in the public enterprises and industrial reconstruction department, however, said the state government had written to NTC earlier this year clarifying that permission would not be granted to develop real estate projects on land sold by it.
“But NTC says it had washed its hands of land it had already sold and that the state government should sort it out with the developers,” added this official, who did not want to be identified as he isn’t authorized to speak to the media.
NTC executives weren’t available for comments. Calls made to K.R. Pillai, NTC’s chairman and managing director, weren’t answered or returned.
Land sold by NTC fetched Rs1.5-2 crore an acre on average, according to real estate developers.