Kolkata: Metro AG’s retail plans in Eastern India have stalled.
The construction of Metro’s first cash-and-carry outlet here has been halted, after the West Bengal government asked Germany’s largest retailer to put the project on hold until it sorted out a legal wrangle over land that it had leased to the company.
Metro, which had targeted an early July launch, said it has had no word since the project was suspended on 12 February. “We are hoping to get clearance from the government soon,” said Manish Bhargava, spokesman for Metro Cash & Carry.
Metro is planning to set up three distribution centres in Kolkata, its third stop in India after Bangalore and Hyderabad, at cost of about Rs70 crore each. The company will also invest substantially on infrastructure development.
While the Metro project is unrelated, the state government is already battling critics over the forced acquisition of land for industrial use, amid protests that turned violent in parts of the state. That has compelled the authorities to temporarily suspend buying land for industrial use.
The Metro outlet is along the Eastern Metropolitan bypass on a portion of land the state government had acquired many years back to build a part of the state-run highway that runs along the eastern fringe of Kolkata, say government sources, who do not want to be identified. But there is an ongoing family dispute over the ownership of the land, bought from eight families, these officials said.
Officials of the West Bengal Industrial Development Corp. were unwilling to comment on the issue.
Officials in the Land and Land Reforms Department, who did not want to be identified, confirmed that there was an ownership dispute over the land and that it was being litigated for years. It is not immediately clear what prompted the government to now ask Metro to halt work.
“Metro has only leased the land and there has not been any breach of law on our part,” Bhargava said.
Metro has had a chequered path so far in its Indian foray.
In 2003, the first Metro outlet in Bangalore opened to protests from the Bangalore Agriculture Produce Marketing Co-operative. As a result, the company was prevented from selling agricultural products, such as fruit and vegetables, as it does in outlets elsewhere in the world.
In December, Metro announced plans to invest close to Rs2,000 crore in India over three years for a pan-India network of 15-18 stores.
Kolkata has featured very high on Metro’s India map, because West Bengal is among the biggest producers of fruit, vegetables, fish and rice in India.
Despite the impasse, Bhargava maintains that Metro will open shop in Kolkata on schedule.
The Kolkata outlet is being targeted to be opened to coincide with the entry of the new managing director of the company’s Indian operations, Martin Dlouhy.