Explained: What’s the deal at centre of Karnataka protests?
The deal dates back to the previous tenure of Chief Minister H D Kuruswamy, then heading a JD(S)-BJP coalition, with BJP leader B S Yeddyurappa as deputy CM.
JSW Factory in Karnataka. (Express Photo by Amit Chakravarty/File)
A 2006-07 land deal between the then Karnataka government and JSW Steel Ltd has newly sparked a controversy, with the Opposition staging protests and demanding reversal of a recent government decision on the deal. What is it all about?
The land & the lease
The deal dates back to the previous tenure of Chief Minister H D Kuruswamy, then heading a JD(S)-BJP coalition, with BJP leader B S Yeddyurappa as deputy CM. The government signed two lease-cum-sale agreements for grant of a total 3,667 acres to JSW Steel Ltd in Ballari district. The first deal in 2006 was for 2000.58 acres in Toranagal and Karekupa villages, and the second in 2007 for 1,666.73 acres in Toranagal, Moosanayakanhalli and Yarabanahalli villages. The first parcel was on a six-year lease and the second on a 10-year lease, at the end of which these would be converted into sale deeds. The land was granted at Rs 1,22,195 per acre, the same cost at which the government had acquired it in 2005 for a power project.
The first lease was due to be converted into a sale agreement in 2012. But a decision was put off on account of a 2011 report by the Karnataka Lokayukta on illegal mining naming JSW Steel and other firms. The second lease was due to be converted into sale in 2017, if JSW fulfilled all its lease obligations.
After the Congress came to power in 2013, it set up a cabinet subcommittee headed by minister H K Patil to oversee implementation of the Lokayukta’s recommendations. At a Cabinet meeting in 2015, the government postponed a decision after Patil and others argued that no decision should be taken without taking a legal opinion.
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What has happened now
On May 27 this year, a Cabinet meeting of the JD(S)-Congress government decided to convert the lease agreements into absolute sale agreements. It cited the opinion given by the state Advocate General on March 3, 2018, that no legal proceedings were pending against JSW on account of the 2011 Lokayukta report.
A chapter of that Lokayukta report had stated that affiliates of JSW Steel Ltd had paid bribes to the tune of Rs 40 crore to Yeddyurappa during his tenure as CM in 2008-11, allegedly to overlook illegalities in the mining sector. In the AG’s opinion, “it is not brought to my notice that any criminal proceedings are pending against the lessee pursuant to the Hon’ble Lokayukta’s report, in fact Hon’ble High Court of Karnataka in WP No 44071/2011 quashed the said chapter 22 of Hon’ble Lokayukta’s report on ground that it was outside the scope of reference made by government of Karnataka”.
Why the protests
One question being raised is about the land being given at the lease agreement cost of Rs 1,22,195 per acre. The BJP, which staged a two-day sit-in protest in Bengaluru last week, has pointed out that National Highways Authority of India has acquired land in the same region at Rs 40 lakh per acre.
Another question being raised whether JSW Steel has been actually exonerated from legal proceedings pertaining to the 2011 Lokayukta report. Congress MLA Patil, who had headed the 2013 cabinet subcommittee, has said that legal proceedings are pending and the state government has not obtained a legal opinion through proper channels. Patil has written to the CM and Industries Minister K J George calling for reversal of the decision.
Government stand
The government has said it is only honouring an agreement to which the BJP and Yeddyurappa were also a party. “When an absolute sale deed is implemented as per such agreements the sale price is not fixed according to the prevailing market rate. This is the norm,” Industries Minister George said. Ballari in-charge Minister D K Shivakumar said: “If you want to encourage industries and create jobs then you have to honour agreements.”
Amid the protests, the CM has said the state government is willing to reexamine the decision to sell the land.
In a statement, a JSW spokesperson said: “The said land was leased to JSW Steel for expansion of its steel plant capacity at Vijayanagar and the lease hold land shall become a free hold land as per the terms of original lease on expiry of specific period of lease.”
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