Mangalore SEZ: NTPC seeks Rs 60-cr compensation

C. Shivkumar

Karnataka's move to transfer land to Suzlon Infrastructure

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The reasons
Land was originally allocated to NTPC for which it had made part payment.
Had spent Rs 38 cr for developing the site despite power plant proposals
on the back burner.
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Bangalore , Oct. 10

The public sector NTPC Ltd has expressed reservations over the Karnataka
Government's proposal to transfer land near Mangalore to the
multinational Suzlon Infrastructure Ltd (SIL) for setting up a Special
Economic Zone (SEZ).

NTPC has demanded a compensation of close to Rs 60 crore for the
transfer, since it was originally allocated to it for which it had made
part payment for the site at Padubidri near Mangalore. A copy of this
communication was made available to Business Line. For the SEZ, Suzlon
had sought a land allocation of 500 acres.

SIL is an associate company of the transnational Suzlon Wind Energy
Corporation. A spokesman for Suzlon, when contacted, said the company
had made the application to the State Government for setting up an SEZ
exclusively for high technology engineering industries. It also proposed
to set up a manufacturing facility within this SEZ, through another
associate company, Suzlon Energy Ltd, for making turbines.

The Suzlon spokesman declined to comment on NTPC's compensation demand.
Instead, he said the company was awaiting allocation of the land for the
SEZ. The company's investment for the SEZ is estimated at Rs 250 crore.
Suzlon's proposal for the SEZ was cleared by the Karnataka Government
more than a month ago.

NTPC's compensation demand, the communication said, was made on the
basis of the tripartite agreement entered between the PSU, the Ministry
of Power and the Karnataka Government in 1996. Under that agreement, the
State Government was expected to compensate NTPC Rs 21 crore in the
event of sale of land and development expenditure. The PSU was allotted
97.25 acres of land in the region of the 398 acres planned for setting
up the power plant.

Although the power plant planned by NTPC is now on the back burner, the
company had gone ahead with development of the land. For this purpose,
the PSU had spent another Rs 38 crore for developing the site.
Accordingly the compensation to NTPC would have to be paid by the State
Government, or Suzlon would have to be allotted another location for
setting up the SEZ.

In the vicinity of the SEZ, the private sector Nagarjuna group is now
setting up a power project. Besides, another public sector ONGC had also
proposed setting up an integrated petrochemical complex in the region.

http://www.thehindubusinessline.com/2006/10/11/stories/2006101103710900.htm