Kolkata: In an innovative barter deal, a private developer is acquiring 600 acres of land for an IT park the West Bengal government wants to develop; in return, the government will create the support infrastructure for another 600 acres this company is developing into a township.
The deal between Vedic Realty Ltd, a Kolkata-based developer, and the state government may have been prompted by events at Nandigram and Singur, where efforts by the state to acquire land for a special economic zone (SEZ) and a Tata Motors car factory, respectively, resulted in protests by farmers unwilling to sell land. The protests were mirrored across the country where farmers opposed the acquisition of their land for SEZs and industrial projects, and forced the Central government to ask states not to acquire land on behalf of SEZ developers.
“We will buy the land and transfer it to the IT department for free. In return, the government will create infrastructure for our upcoming 600-acre township,” said Raj Modi, managing director of Vedic Realty. His company recently signed an agreement to this effect with the state’s IT department after the West Bengal cabinet approved the deal. This agreement could well serve as a template for any state government that wants to acquire land. “We aren’t calling it direct purchase, and certainly not land acquisition. We are saying Vedic will assemble 600 acres for our IT department,” a bureaucrat said on condition of anonymity.
The math of the deal does appear to favour the government, but Modi said that wasn’t the case.
The 600 acres the company plans to develop into a township is in the same area where it plans to acquire land for the government’s IT park.
“At the end of the day, we are going to pay some Rs1,200 crore for the 1,200 acres that we have to acquire there. You may say we have acquired half already, and we’ll have to acquire 600 acres more,” Modi said.
He claimed that although he would be giving the government Rs600 crore worth of land for nothing, he would get “a seven-km road to connect the township with Kolkata, processed water and a sewage disposal facility”. He added that the company owns most, but not all the land it needs for the township because some landowners are holding out for a better price.
“Under the agreement, the government will have to acquire whatever land we have not been able to acquire in the area (for the IT park as well as the township) using the Land Acquisition Act,” Modi said.
Apart from infrastructure support, the presence of a government-promoted IT park close by will likely increase the value of land in Vedic Realty’s township, where the company has already built villas and a spa resort called Vedic Village on 150 acres.
“We don’t want to get into land acquisition now. Plus the government cannot pay market price. If you pay market price, you’ll never ever get two plots for the same price. That’s a situation that a government just can’t get into—it would lead to controversy, audit, inspection…. So we got a private company to assemble the land for us,” said the bureaucrat.
West Bengal’s IT department needs to find homes for firms such as Infosys Technologies Ltd that are looking to set up development centres in Kolkata, but don’t want to do so in the current IT hub Rajarhat because it is too expensive. Infosys has asked the state government for 100 acres, but has at the same time refused to pay the going rate at Rajarhat, Rs2.16 crore an acre, said Bengal’s IT secretary Siddharth.
Under the agreement, Vedic Realty has committed to “assemble” 600 acres for the IT department by the end of this year. And the government will have to create infrastructure for the company’s township by September next year.