Investors can take a breath because state government changed clause of land agreement - By: Real Estate Advise

Investors complaining over the “stiff project completion” target in the changed scenario when they had to buy a portion of the land on their own may now get a breather. The Mamata Banerjee government has decided to relax the project completion target clause in the land lease agreement from three years to a maximum of five years. The move has come as a relief to big investors, particularly in the steel industry, who are yet to get the land under their possession mutated.
The relaxation — once approved by chief minister may help ease out the tension over projects worth over Rs 51,000 crore. The proposal lying with the land revenue department will call for fresh land lease agreements with the new clause. Investors who could not complete the projects within the three-year period ran the risk of losing the land allotted to them under the existing agreement. The pullout would have deprived the state of a total Rs 80,000 crore investments lined up in Bengal.
The proposed amendment is likely to clear the uncertainty over eight mega projects in the state — JSW Bengal steel project at Salboni, Jai Balaji steel project at Raghunathpur in Purulia, Adhunik Group project near Asansol, Shyam Steel project at Raghunathpur, Matix fertilizer project in Panagarh, OCL cement project near Salboni and DPSC power project in Haldia. “The new lease agreement is almost ready. The state government has approved it in principle. The government will now give five years instead of the existing three to finish the project, failing which the state will take the land back. Once LR department clears the new draft WBIDC will start signing agreement with the concerned industry,” sources added. But the amend will also require a change in the land lease agreement with the requiring body — West Bengal Industrial Development Corporation. Under the new arrangement, the Corporation will assign the lease agreement to the industry concerned. “Earlier WBIDC use to sub-lease the land to industry but this is not legally correct. The industry has also faced problems. In the new format LR department will set a deadline for 5 years to WBIDC in the lease agreement for starting of project. The WBIDC will also have the discretion to fix shorter completion targets for smaller units. Like for steel industry it would be 5 years for small projects that could be less,” added sources.
Incidentally, JSW Bengal has 4,334 acres for a 3-million tonne steel plant and 300-MW power plant in the first phase with an investment of Rs 20,000 crore. Incidentally, the project is also facing land hurdle as mutation for the entire 4,334 acres is still pending. Jai Balaji has so far been allotted 1,094 acres for 2.5-million tonne steel and 3-million tonne cement plant with an investment of Rs 16,000 crore. Shyam Steel and Adhunik have got 600 acres and 505 acres respectively. Shyam Steel has proposed 1.1-million tonne steel plant with an investment of Rs 3,500 crore and Adhunik has proposed an investment of Rs 7,000 crore. Matix has got 500 acres for 1.5 million tonne fertilizer plant with an investment of Rs 4,900 crore.
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