Tata, Jamshedpur?

WHEN the rest of India looks at Jamshedpur, it sees a model city the Government can never build 8212; well-designed houses, good schools an...

WHEN the rest of India looks at Jamshedpur, it sees a model city the Government can never build 8212; well-designed houses, good schools and hospitals, parks, stadiums, clubs, a golf course, fountains, round-the-clock power and clean water, and 24-hour security. But when the Babulal Marandi government looks, it sees a company that has 8216;8216;violated8217;8217; land lease terms to build this dream city. So, it has sought Rs 5,437.43 crore as compensation. Tisco Tata Iron and Steel Company privately threatens it will 8216;8216;sell every brick and iron8217;8217; in the town and move out, rather than submit to the 8216;8216;unacceptable mindless8217;8217; demand.

Tisco spends about Rs 130 crore annually on the maintenance of Jamshedpur, which has a population of around seven lakhs. It is the country8217;s first planned town, named by British Lord Chemsford in 1919. The dispute is over renewal of lease of the 12,708.59 acres of land on which the town was built by Tisco. It holds Tisco and its affiliate companies8217; plants, offices and the entire Jamshedpur population. Tatas have been trying to renew the lease since 1995, but the government has been seeking repeated extensions in court.

On July 1, Samata Party MLA and Land Revenue Minister Madhu Singh upped the ante, raising the demand for Rs 5,437.43 crore at a press conference. While he directed Finance Secretary Devashish Gupta to review the matter, he has asserted that Tisco would have to pay the money. But since then, realising what8217;s at stake, both sides have moderated their stand.

Last week, Industry Minister P.N. Singh was talking about 8216;8216;the good relationship8217;8217; shared by the government and Tisco and adding the company could always approach 8216;8216;the industrial committee headed by the Chief Minister8217;8217; if it had 8216;8216;any objections8217;8217;. Tisco, of course, has more than an 8216;8216;objection8217;8217;, its officials calling the demand 8216;8216;totally unacceptable and full of false accusations8217;8217;. Soon after Singh8217;s press conference, a top manager told The Indian Express: 8216;8216;If the government compels us to pay this huge sum for renewal of lease, the company may prefer to sell every brick and iron at Jamshedpur and set up modernised plants with a township elsewhere.8217;8217;

But officially, spokesperson Sanjay Singh points out they have had no written intimation from the state government over the Rs 5,437.43-crore demand. He adds: 8216;8216;There are four categories of lands granted to the company on lease. There is no dispute over the land where plants are located. Let the renewal of its lease be made by the government. And a retired HC judge be appointed to settle the dispute over the three other categories of land.8217;8217;

As per the Jharkhand govt document, Tisco owes them:

8226; Rs 950.74 crore as tax collected by it from village markets
8226; Rs 297.07 crore as fine for 8216;8216;violating8217;8217; the agreement and building factories
8226; Rs 675.58 crore for 8216;8216;violating8217;8217; the lease agreement and setting up bazar and commercial complexes
8226; Rs 10.61 crore as tax for 40 years between 1.1.56 and 31.12.95.
8226; Rs 2,573.48 crore as tax for six years, beginning 1.1.96 to 2001
8226; Rs 506.93 crore as interest at the rate of 13 per cent on the above items
8226; Rs 122.42 crore as land tax on 243 acres of new land sought by Tisco
8226; Rs 134.44 crore as price, tax and interest for the renewal of 267.95 acres of land meant for housing
8226; Rs 705.16 crore for effecting change in the form of 348.23 acres of leased land
8226; Rs 22.69 crore which Tisco owes but is hanging fire because of litigation
8226; Rs 546.09 crore as tax, cess, interest and for 8216;8216;illegally8217;8217; sub-letting 463.57 acres to Telco between 1970-72.

The land lease was granted by the erstwhile Bihar government, as per a directive of the Supreme Court, for 40 years in 1984, with effect from January 1, 1956. As a result, it expired on December 31, 1995. Tisco sources say they have been trying to renew the lease since, but to no avail. When the Laloo Prasad Yadav regime did nothing, the company moved court. In July 1999, the Patna High Court told the state to take a decision on the matter 8216;8216;within a specified period8217;8217;. Still, the Bihar government didn8217;t renew the lease.

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After Bihar was bifurcated, the Jharkhand High Court issued notices to the new state on the matter. The government has been seeking one extension after another in court and the latest hearing was scheduled for July 2. Just one day before that, Singh released an eight-page document demanding Rs 5,437.43 crore from Tisco for renewal of the lease. However, in court the next day, the government again sought more time to file a reply, though sources say the document may finally become a part of its affidavit.

The document alleges that Tisco 8212; which was given land for production 744.16 acres, housing 1,418.94 acres, public utilities 2,235.39 acres, right to sub-lease 4,301.75 acres and vacant land 4,008.35 acres 8212; had violated terms of agreement of the lease. These stated that before changing the form of any land or sub-letting it, Tisco would seek the government8217;s permission. The document says: 8216;8216;There are hundreds of examples where Tisco transferred land to different companies and individuals for setting up industries, residences, commercial establishments, stadiums and clubs without taking permission from the state government.8217;8217; It adds that Tisco used 8216;8216;influence8217;8217; to keep this under wraps.

Further, the document says, the Tisco-government agreement made it clear that the company would pay the money due to the state. But instead of doing that, it charges, Tisco always takes recourse to litigation. 8216;8216;Even today there are eight cases in which the government8217;s Rs 22 crore is to be realised from Tisco.8217;8217;

The document cites examples like setting up of Lafarge cement company on 186.16 acres and golf club on 90 acres of vacant land, plus 8216;8216;sale8217;8217; of 30 acres of land to NICCO for a 8216;8216;water kingdom8217;8217;, to buttress its claims. Tisco had not given any account of these lands to the state government till date, the paper claims. The document also says that the money being charged by the state government for the land 8212; fixed at Rs 44,000 per acre in 1984 and around Rs 30 lakh per acre now 8212; was too little and was causing 8216;8216;loss to the tune of billions of rupees8217;8217; to the government. It adds that Tisco 8216;8216;has lost direction8217;8217; and was now trading in land, 8216;8216;which is more profitable8217;8217;.

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A top Tisco manager finds this claim 8216;8216;mindless8217;8217;, pointing out: 8216;8216;The value of land in Jamshedpur has grown over the years not due to the government8217;s munificence, but due to the industrious Tatas.8217;8217;

The Opposition has jumped to Tisco8217;s defence, flaying Marandi for putting Jamshedpur in jeopardy. 8216;8216;The CM is going abroad to invite investment in the state but the Tatas who have made huge investments here are being pressured to cough up an amount no company can pay,8217;8217; PCC chief Pradeep Balmuchu said.