Monday, January 15, 2007

Mumbai/Pune : RIL deals directly with farmers for SEZ land in state

PUNE/MUMBAI: In a major shift in strategy on special economic zones (SEZs) in Maharashtra, the Mukesh Ambani-led Reliance group has decided to buy land outright from farmers, instead of involving any government agency to acquire it.

Reasons for the move are many. The delay in the passage of the Maharashtra State SEZ and Designated Areas Act, concerns raised by Congress president Sonia Gandhi on land acquisition and — most importantly — widespread agitation at Singur and Nandigram over forced acquisition of agricultural land by the West Bengal government have resulted in the state government going slow on the plans.

“We have now decided to purchase land directly from farmers,” confirmed the RIL spokesperson for Maharashtra SEZs. He, however, refused to discuss the price being offered but said, “It’s much more than the prevailing market rates. Farmers are now happy and queuing up to offer their land,” he claimed.

Sources in the state government indicated that the company changed its tack sometime in December. “So far, they have bought close to 700 hectares,” a senior official told ET.

According to a revenue department official, nearly 80 purchase deeds have been registered in the last few days in Raigad district. The company has paid a stamp duty of around Rs 60 lakh on these registrations. This is an additional cost for the company, which is understood to have paid farmers three times the government-listed rates on direct purchase of land.

As per the earlier plan, the Maharashtra government was to acquire land spread in 45 villages for Reliance SEZs at government rates, which comes to a couple of lakhs per hectare, against the market rate ranging Rs 40-Rs 75 lakh per hectare, depending on the location. The government’s role as a land acquirer for Reliance had come in for sharp criticism.

However, it’s not yet clear whether the company wants to follow the direct buying route or would involve the government at a later stage.

The group is planning two mega SEZs in Mumbai —Navi Mumbai SEZ and Maha Mumbai SEZ. It has already taken over 450 hectares on first lease from Cidco for its Navi Mumbai project. The lease deed was registered prior to March 31, 2006, and a stamp duty waiver was given to the company.

However, last year, the company had decided to drop the acquisition route — where a state agency acquires land and then transfers it on first lease to the developer. It has, instead, started buying land directly from farmers.

Reliance was, in fact, looking at starting the formalities of leasing over 10,000 hectares once the Maharashtra State SEZ and Designated Areas Act was passed. The legislation would enable developers to get a stamp duty waiver if they directly acquire or lease land. A stamp duty waiver was available between October 2005 and March 2006.

The state government, however, did not extend the stamp duty waiver beyond March 2006. It was reckoned that the waiver would be automatic, once the SEZ legislation is passed by the Assembly and notified by the state government. This also slowed down the SEZ development.

Now, passage of the state SEZ legislation could be delayed till the Centre formulates a rehabilitation package for displaced farmers. Last year, Congress president Sonia Gandhi made it clear that agriculture land ought not be used for these zones and the dominant view inside the party is that the policy should not be construed as anti-farmer.

Around 72 SEZ proposals have so far been approved in Maharashtra, but their fate is unknown due to lack of clarity on land acquisition norms.

Some of the big-ticket SEZ projects lined up for Maharashtra include Bajaj Auto in Aurangabad, Bharat Forge (Pune), Videocon (Pune and Aurangabad), Shapoorji Pallonji (Nagpur), Indiabulls (Raigad), Wipro (Pune), Syntel International (Pune), K Raheja Universal (Navi Mumbai), Hiranandani Builders (Powai) and City Parks (Pune). At present, developers which register their deeds will have to pay stamp duty. With Reliance setting a precedent, the cost of land acquisition would go up for others.

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