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WHY LAND ACQUISITION IS SUCH A VEXING PR OBLEM
Thiess India the Indian subsidiary of $24.4-billion Australian
infrastructure, mining and real estate firm Leighton Holdings
received a letter from NTPC terminating the contract between
them. Despite several extensions, the notice said, Thiess had
failed "to make any headway" in extracting coal from Pakri
Barwadih, a coal block in Jharkhand.
At one level, the notice was the latest broadside in an increasingly acrimonious dynamic between the two companies. At
another level, it was the latest act in a cautionary tale of how
gnarled and twisted land acquisition has become for India Inc
in general and the mining sector in particular.
It goes beyond the law and into the practical endeavours of this
exercise. It goes beyond the traditional reasons cited, of villagers' demands for better compensation and jobs, and into the
complex, transactional construct of land acquisition, and the
climate of mistrust and forced choices it fosters.
The flashpoints keep increasing. The Reliance SEZ in Raigad.
Coal India in Korba, Chhattisgarh. Tata Motors in Singur, West
Bengal. The abortive hydel power boom of Arunachal. The previous land acquisition law gave the government sweeping powers to acquire land — at low
rates and by ignoring local
concerns by citing public
interest. This resulted in an
inevitable blowback from
communities.
In 2013, the previous Congress-led government introduced a new law. Among
other things, to mollify local
communities, it asked private companies to obtain
consent of 80% of projectaffected families. "This new
Act has swung to the other
extreme," says Gaurav Jain,
a real estate professional
who worked with Emaar
and DLF before setting up
his own consultancy, Samyak Properties & Infrastructure. Little
land acquisition has happened under the new law, partly because of the economic slowdown and partly because of the law
itself.
Change might be coming. A stated intent of the new Bharatiya
Janata Party-led government at the Centre is to get the wheels
of industry moving. "Till now, industry was saying the Act
needs a relook. But now, even the new government is saying
the Act has made land acquisition difficult and expensive," says
Jain. "It will undergo changes. There is no way out."
A department under commerce and industry minister Nirmala
Sitharaman plans to make a submission to the rural
VOLUME 1, ISSUE 8 — JULY 2014
development ministry — which is in charge of the land acquisition legislation — to do away with the 'social impact assessment'
before land acquisition, which entails gauging a project's impact
on local livelihoods, sources of drinking water, grazing lands,
places of worship, etc.
Earlier this week, state governments joined the chorus against
the new land acquisition law, saying its provisions will adversely impact infrastructure projects and the overall investment climate in the country. "With this land acquisition bill", says Vishal
Dev, industry secretary, Orissa, " We Can just forget about attracting industry." "If land acquisition took four to five years
under the old act," Dev told ET on the phone, "it will take 1.8-2
times as long with the new one." That is because, he says, the
new bill wants more notices to be given out, more studies to be
commissioned and stipulates long periods for communities to
respond to these notices. In its initial remarks after taking over, it
appeared that the NDA would retain the new law, but work on
improving its implementation — to make it easier for industry
while being considerate to the needs of the land owner. It's a
balance that was, even after 10 years, never achieved at Pakri
Barwadih.
'Pakki Barbadi'
With geological reserves
of 1.6 billion tonnes, Pakri
Barwadih is the largest
coal block given out by the
Government of India for
captive use till date. In all,
since 1993, the government has given out 195
blocks, 155 of them between 2004 and 2011. Of
this, very few have got
going. Most have been
held up in processes or
clearances, land acquisition being one of the issues.
Pakri Barwadih was allotted to NTPC in 2004 at a time when the company wanted to meet
20% of its coal requirements through its own blocks. "The company's then-CMD told us it was a goldmine for NTPC. We could
use it to meet our coal requirements," recalls a former senior employee in NTPC, not wanting to be named. "Employees now call
it pakki barbadi (definite ruin)."
Located about 23 km to the south of Hazaribagh, BJP leader
Yashwant Sinha's erstwhile constituency, this is a poor part of
the country. Most of the 2,000-odd households living over the
block eke out one crop from their fields during the rains and
work as labour in Hazaribagh or elsewhere the rest of the year.