Orissa misused law to acquire land for Vedanta,Posco: CAG

The Comptroller and Auditor General has unearthed a land scam in Orissa where the state government acquired land for industrial houses like Vedanta and Posco by reportedly misusing existing provisions of the Land Acquisition Act

Written by Debabrata Mohanty | Bhubaneswar | Published:April 2, 2012 2:58 am

The Comptroller and Auditor General (CAG) has unearthed a land scam in Orissa where the state government acquired land for industrial houses like Vedanta and Posco by reportedly misusing existing provisions of the Land Acquisition Act.

The CAG also found that the companies were not using the land for which they were allotted and instead,hoarding land whose market value ran into thousands of crores.

The CAG report said 4,967.08 acres of private land,valued at Rs 165 crore (approximate present market value is Rs 901.305 crore),were acquired between July 2002 and March 2011 for setting up of industries by six business houses using the emergency provisions under Section 17(4) of Land Acquisition Act,but the land was not used for several years.

The government acquired land for Aditya Aluminium (Sambalpur) — 2021.41 acres,Vedanta Alumina Limited (Kalahandi) — 826.56 acres,Dhamara Port Company Ltd (Bhadrak) – 1,070 acres,and Posco India Ltd (Jagatsinghpur) — 437.86 acres.

In Orissa,land for industries is acquired under Central and state laws,primary of them being the Land Acquisition Act,1894. The Industrial Infrastructure Development Corporation of Orissa Act,1980,is also invoked in cases where Industrial Infrastructure Development Corporation (IDCO) acquires land for companies. Between 1995 and 2011,the Revenue and Disaster Management Department allotted 50276.887 acres of land,including 33355.127 acres (66.34 per cent) of acquired private land to 107 companies for setting up of industries in 16 districts.

The CAG found that none of the conditions prescribed in executive instructions of September 1985 issued by the government for land acquisition under emergency provisions were fulfilled in those cases.

“Instead of giving detailed justification for applying such provision,only general remarks like ‘the project is being executed on priority basis’,‘requirement of land was of emergent in nature’ were indicated in the applications by the requisitioning officers. The land was not put to use even after 15 to 75 months from the date of publication of notification under section 4(1) against the stipulated time period of six months,” the report said.

The biggest scam could be hoarding of 5293.22 acres of land by IDCO and two companies for a period ranging between three and 15 years. IDCO was allotted 1141.98 acres of government land 4151.24 acres of private land valued at Rs 66.68 crore (present market value Rs 2631.98 crore) between 1996 and 2006. In 1996,IDCO handed over 2,800 acres to Tata Iron and Steel Company for a factory at Gopalpur. IDCO handed over 1,300 acres to Aditya Aluminium between 2006 and 2008.

The CAG noted that in some cases compensation award passed without reckoning the cost of standing trees. And due to wrong computation of the market value of land,there was under-assessment of compensation which benefitted the promoters of industries.

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