Wednesday, January 10, 2007

RIL SEiZed with land purchase on cap talks



GURGAON: Mukesh Ambani’s Reliance Industries (RIL) is on an aggressive
land acquisition spree for its Haryana multi-product SEZ project amidst
speculation in the policy corridors that land acquisitions for SEZs may
be capped at 10,000 acres. According to sources, the country’s biggest
corporate house has acquired close to 8,000 acres for Rs 1,600 crore.

However, if the government goes ahead with the policy, it will only be
with prospective effect and, in all likelihood, the company would not be
asked to sell off part of the acquired chunk of land, said sources.
Perhaps this is one reason why RIL may have expedited the land
acquisition process.

As of now, RIL is buying 60-70 acres of land from farmers everyday at an
average price of Rs 20 lakh per acre. At this rate, RIL would be able to
cross the 10,000-acre mark in less than two months.

When contacted by ET, a Haryana government spokesperson said, “It’s too
early to comment on the issue. We will have to wait for the actual
policy directives.” RIL spokesperson declined comment.

However, some industry sources feel that if the new policy is
implemented mid-way, early movers such as RIL in Haryana and Unitech in
West Bengal would have an unfair advantage.

“To ensure a level playing field, the policy should have prospective as
well as retrospective effect. If a company already has more land than
notified in the cap, it should be asked to divest,” a Delhi-based
promoter of a well-known real estate and infrastructure company pointed

For its 25,000-acre multi-product SEZ project, RIL needs to buy 75% of
the land on its own which works out to 17,500 acre. In keeping with the
SEZ policy, the government would release its share of the remaining land
only when RIL completes its acquisition or if the company is facing
difficulty in buying land.

Meanwhile, the company has also floated a special purpose vehicle,
Reliance Haryana SEZ, for the project in which the state government’s
HSIIDC has 10% sweat equity.

RIL’s Rs 25,000-crore SEZ project aims at creating five lakh jobs in the
state and is pegged to be a hub for manufacturing, services and
agri-based industries. The project also has provisions for a cargo
airport and a 2,000-mw power plant.


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