Focus on rehab has SEZs going through acquisition pangs

The carte blanche available to states to pick up land for developers is already gone. And with the new National Policy on Rehabilitation and Resettlement , bringing in the principle of rehabilitation before displacement...

The carte blanche available to states to pick up land for developers is already gone. And with the new National Policy on Rehabilitation and Resettlement (NPRR 2007), bringing in the principle of rehabilitation before displacement, Haryana’s happening investment party could be spoiled.

While two of Haryana’s most ambitious projects — Reliance’s SEZ in Gurgaon and Hotmail man Sabeer Bhatia’s Nano City project in Raipur Rani — have not been able to take off following problems over land acquisition, even the 267-km-long Ambala-Rohtak-Bawal (ARB) Expressway, which was to be built on BOT (build, own, operate) basis and was aimed at enabling vertical integration of the NCR with the northern part of the state, has hit the roadblock.

“The media hype around Nano City has led to land prices spiralling beyond our calculations,” says Naval Bhatia of Nanoworks.

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Reliance, which claims to have acquired 8,000 acres for its 12,500-acre SEZ in Gurgoan, is also finding it difficult to acquire those last few hundred acres.

Under the new R&R package, land acquisition by the Government will be restricted to cases where at least 70 per cent of the land has already been purchased by developers to facilitate project development in case of hold-outs by a few. And the state will perforce also have to pay the market rate as solatium, which has been raised to 60 per cent from the earlier 30 per cent. The new R&R norms coupled with sky-rocketing land prices in Haryana (land prices in areas falling in the National Capital Region are already touching Rs 1.5 crore per acre, with those near highways fetching even Rs 2 crore per acre) will make land acquisition a daunting task for private investors.

“Investors will have to be asked to divert attention beyond NCR,” says Haryana Finance Minister Birender Singh. “We can only pitch in for maintaining the crucial congruity of the project, but private developers will have to first acquire the initial 70 per cent,” he adds.