RIL deals directly with farmers for SEZ land in state

TIMES NEWS NETWORK[ TUESDAY, JANUARY 16, 2007 04:22:39 AM]

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.
http://economictimes.indiatimes.com/News/Economy/Infrastructure/RIL_deals_directly_with_farmers_for_SEZ_land_in_state/articleshow/msid-1209159,curpg-2.cms