Kolkata: Unable to acquire land on its own, the government of West Bengal has asked real estate developers building residential and commercial complexes in Rajarhat township, on the outskirts of Kolkata, and other adjoining areas to buy land for it so that it can build the civic infrastructure.
Because it is unable to build roads and other civic amenities in Rajarhat—a 28 sq. km township, which was to be home to some one million people—the state government recently stop-ped giving possession of some 4,500 plots spread over 22 sq. km. Possession would be given only after “infrastructure development work is completed”, said West Bengal Housing Infrastructure Development Corp. Ltd—an arm of the state government, which is developing the Rajarhat township—in a notice few months ago.
Seeking support: A file photo of a residential complex site in New Town, Rajarhat. Indranil Bhoumik / Mint
“Partnership with private players is the only way to avoid political controversy over land acquisition,” said Rabin Mondal, chairman of Bhangar Rajarhat Area Development Authority (BRADA)—a civic body, which has administrative control of Rajarhat and adjoining areas.
When, 10 years ago, the state government acquired some 3,000ha of land for the Rajarhat township, it faced almost no resistance, but things have changed over the past couple of years as the Trinamool Congress—the state’s main opposition party—led farmers’ protests against forcible land acquisition for industrial projects in Singur and Nandigram.
In Singur, the state government had leased 900 acres of land to Tata Motors Ltd and its component suppliers for building a small car factory. A little over a year ago, Tata Motors pulled the plug on the project and moved its small-car factory to Sanand in Gujarat because of the protests.
The state government had planned to set up a chemical hub in Nandigram, but was forced to abandon the proposal after protests led to sustained violence in the area that left dozens dead.
Since the Singur and Nandigram debacles, West Bengal has been experimenting with various models of partnership with private real estate developers for land acquisition.
In early 2008, the state’s information technology (IT) department entered into a partnership with two firms for jointly building an IT township on the eastern fringes of Kolkata, under which the state was to receive 600 acres of land for free in return for developing civic infrastructure for the township.
The partnership was to serve as a template, but it came to light in August that at least one of the two firms was forcibly seizing land from farmers. This prompted the state government to scrap the IT township where companies such as Infosys Technologies Ltd and Wipro Ltd had already been allotted 90 acres each.
But the partnership with real estate developers in Rajarhat and adjoining areas seems to be doing well. Some 50 private companies have agreed to buy land for BRADA, according to Mandal, and around 11 of them have already managed to secure “sizeable tracts of land”, paying farmers the market price at the least.
It is “almost compulsory” for all real estate developers to acquire land for BRADA to build roads and civic amenities, according to a person who did not want to be named. “Unless you acquire land for BRADA, it wouldn’t sanction your construction plan,” he added. “What is more, if BRADA couldn’t build the connecting roads, you wouldn’t be able to sell your property.”
BRADA doesn’t have the infrastructure to acquire land, said Piyush Bhagat, director of Spring Valley Developers Pvt. Ltd—a realty firm, which has on its own acquired some 100 acres in Rajarhat and areas adjoining it over the past seven years. “We can’t do without BRADA’s support, so there is no alternative—we have to give some land for free for BRADA to build roads,” he added. Spring Valley is giving 5 acres for expansion of the main arterial road that runs through the township.
For most private players, acquiring land wasn’t difficult, according to Sandip Jain, head of finance at Canopy Project Pvt. Ltd—a firm planning a 180-acre residential complex. “We completed the acquisition in three years,” said Jain. “It wasn’t difficult because we agreed to accommodate landowners’ reasonable demands.”
The key to peaceful acquisition is willingness to pay a small premium over the market price, according to Bhagat. “We faced some resistance at times, but no political resistance at all, and we could overcome whatever little resistance we faced by paying say 5-10% more than the ruling market price,” he said.