Kolkata: Failure to acquire land in West Bengal for special economic zones (SEZs) has derailed investments of at least Rs29,500 crore in the state, nipping the communist-ruled state’s six-year ambition to attract investments for manufacturing as it competes with 28 other states.
Five projects promoted by two business houses—Indonesia’s Salim Group and Videocon Realty and Infrastructure Ltd,—lead that investment halt and nine other smaller such projects are also on hold.
West Bengal has been wooing investors with tax-friendly investment enclaves that would need 65,000 acres. The state has cleared projects that require 29,594 acres of land. The land, mostly owned by farmers, has not been acquired due to increasing political pressure.
The Salim Group has halted two projects at Nandigram and Haldia, which need 22,230 acres and an investment of Rs12,500 crore. Also postponed is a Rs15,000 crore petrochemical project that Indian Oil Corporation (IOC) proposed at Haldia as the mainstay of a chemical hub.
The pull-back has prompted Videocon to put its projects in West Bengal on the back burner. It had proposed to invest Rs2,000 crore among three projects on 2,224 acres of land.
“At Siliguri, where we require 1,080 acres for a multi-product SEZ we have managed to acquire 25% of the land, but the remaining has to come from the government,” V.N. Dhoot, chairman, Videocon Group,said. “I think there will be a two-three year wait before things crystallize and we can return to these projects.”
The opposition to taking away land from framers forcibly, even as they have been compensated for it, reached a political pitch when the state helped acquire land for Rs1,000-crore car project for Tata Motors at Singur. Protests at Singur snowballed into an uprising at Nandigram, where people protested land acquisition for a chemicals hub.
The Board of Approval for SEZs has formally cleared about seven SEZs in West Bengal, while 17 others were given clearance in principle in October, after which clearances have come to a near halt.
Most of these projects require smaller plots ranging between 25 and 50 acres. But that has raised questions about whether the land would be used for special projects or become part of a larger ploy to acquire land in a rapidly growing economy with rising inflation that makes goods costly.
“There maybe players who have no real estate business but are interested in getting into the SEZ scenario. Obviously long-term capital gains maybe a goal,” said Vincent Lottefier, country head, Jones Lang LaSalle.