Bengal's rehab clause hits JSW Steel project

Last Updated: Sat, Apr 21, 2012 18:41 hrs

A new rehabilitation and resettlement clause proposed by the West Bengal government is the latest hurdle to hit JSW Steel’s 10 million tonne new steel project.

“A clause has been inserted in the draft agreement sent by the West Bengal Industrial Development Corporation (WBIDC), which is vague and open ended. We don’t have any oustees, land losers have been compensated. How can we agree to something like this?” an official close to the development asked.

The clause in the land lease agreement says companies would have to implement any change brought about by the state or central governments in its rehabilitation and resettlement policy at any point in time.

Incidentally, the lease agreement to be signed with WBIDC is just for 189 acres, given as patta, while the agreement with the land reforms department for the balance 4,145 acres had already been signed. Though less than one per cent the WBIDC agreement is crucial for the ~35,000 crore project at Salboni in West Medinipur, as it is scattered all over the project site.

“There will be a meeting between JSW Steel and WBIDC shortly. The rehabilitation clause is the major issue, all other issues are minor,” an official said. The state government appeared to be confident that the issue would be resolved.

“They had verbally agreed to the rehabilitation clause, I am sure they will be signing the agreement. I am hoping issues will be sorted out soon,” West Bengal commerce and industry minister, Partha Chatterjee, said.

JSW Steel’s compensation for the private land was hailed as an exemplary package that offered compensation, jobs and free shares.

While work at the site, at present, was focused on the township, the impasse over the lease agreement with the state government has been on for the past 11 months. The company, however, has permissible possession of the land.

After taking charge, the Trinamool Congress-led government decided to vest the land directly purchased by JSW Bengal Steel and lease it back after accounting for the permissible limit. JSW Bengal Steel had acquired 294 acres of ryotwari land directly from land owners without formal approval from the land reforms department.

The Land Reforms Act placed a ceiling of 24 acres on land acquisition while Section 14Y of the Act exempted the ceiling, primarily, in four cases: mill, factory, workshops and tea gardens. The government, hence, vested 270 acres.

Early September, JSW Steel vice-chairman and managing director, Sajjan Jindal, had met chief minister, Mamata Banerjee, to iron out differences. Banerjee had assured Jindal that all the issues would be resolved over the next two weeks. The issues, however, continue to linger.

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