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Land Laws

The new acreages

While some mega-projects are still awaiting approval, Calcutta Riverside and a few others have got the nod from the West Bengal government.

Valentine's Day this year brought an unprecedented gift for real-estate developers in Kolkata. The state cabinet cleared Calcutta Riverside, the project to develop the 262-acre Batanagar estate into a modern township, with a nine-hole golf course, high-end apartments, villas, condominiums, a hotel, mall, IT park, hospital and school.

Set to cost INR 1,200 crore, Calcutta Riverside is perhaps the most high profile project to have been taken up in the city in recent years—with the possible exception of the Salim Group's 5,000-acre Kolkata West International, which too was cleared by the cabinet on February 13. Clearly, with assembly elections round the corner, the cabinet was in a generous mood.

But quite a few eyebrows were raised at this generosity. Land is a touchy issue with Left politicians in West Bengal . In August 2005, the state assembly voted to pass the West Bengal land reforms (amendment) bill, but without the controversial provision to remove the ceiling on the acquisition of rural land for industrial, housing or commercial purposes.

Even for land under industrial use, there were endless restrictions. Many a proposal from entrepreneurs wanting to develop the excess land on their factory or turning their sick units into resorts or high-rise apartment blocks have either been rejected or are pending approval.

Among the latter category, there's Hindustan Motors' proposal to develop 16 acres at its Uttarpara factory,
Birla Corporation's attempts to come up with a residential complex on Soorah Jute Mill in north-eastern
Kolkata, as also jute baron Arun Bajoria's reported plans to develop the land in one of his jute mill into luxurious riverside resort.

Of course, a number of realtors got around by forging alliances with the state government—Bengal Ambuja Housing Development Limited, a tie-up between the West Bengal Housing Board and Gujarat Ambuja cements which has built the City Centre mall in Salt Lake, the housing complex, Udayan, on EM Bypass and is coming up with similar projects in Rajarhat. Many of the developments around Rajarhat are also being built along similar public-private partnerships.

The Calcutta Riverside project too had been hanging fire for a year before it was cleared, at the direct intervention of the chief minister's office. What worked in its favour was Section 14(z) of the West Bengal land reforms amendment bill passed in August 2005, which envisages that sick or closed industries, which require investment to become functional again, may sell of their unused land, provided part of their sale proceeds is used to restructure the units or for the labour's welfare.

In effect, what the government has done is opened a window whereby the estimated 41,000 acres of land, now lying closed in closed mills, can be opened up for re-use.

As Sukumar Das, principal secretary in the land and land reforms department of the state government puts it, “The principle is, use is better than no use, and better use is better than lesser use.” With a few riders attached, of course. The project, says Das, must have a “social objective” built into it.

Riverbank Holdings Private Limited, the 50-50 joint venture between Bata India Limited and Calcutta Metropolitan Group Limited (an alliance between Kolkata Metropolitan Development Authority and United Credit Bellani group), had a masterplan ready that combined commercial re-use of the land with socio-economic development of the areas surrounding the Batanagar estate.

Ensuring an equitable deal for the workers was an important part of the project. The 1,097 families living on the estate now are to be rehabilitated in new housing, with a built space of 6,40,000 square feet. This will be the first part of the project to be completed.

Further, the terms of Riverbank Holdings lay down that within 30 days after the end of each calendar year,
it must contribute a sum of INR 35,00,000 for the benefit of the employees of BIL employed in the
Batanagar factory.

Not only that, Sumit Dabriwal, managing director of Riverbank Holdings, says that the masterplan has been prepared after extensive engagement with the local context.

Thus, the estate will allow limited access to people from surrounding areas, so that they can cross over to the other side. The existing Bata girls, boys and primary school will be upgraded and a separate school on 6.65 acre and a 300-bed hospital will be built.

Also, special care seems to have been taken to ensure environmental sustainability. As much as 80 per cent of the property is open space. Some of the trees abounding the estate have been cut down, says Dabriwal, but none that are old and deserve to be preserved, and the buildings, especially the central spine, has been designed around it.

Also there is the IT/industrial park and mall that will generate employment. The 1.2 kilometre riverfront will also be developed with recreation facilities for residents and visitors.

Post completion, Calcutta Riverside will give employment to 30,570 people. No wonder the project was cleared as part of the state's social infrastructure development programme.

The other project cleared in recent times—the re-development of 45 acres of CESC's Mulajore power plant— similarly makes a passing nod at socio-economic development of the nearby areas.

The plant, located in a densely populated area, was closed down some years ago. It is to be redeveloped into a power sub-station, a residential complex and an industrial park.

Last, but definitely not the least, there is the direct benefit to the state coffers, which will see an inflow of INR 12 crore from the Batanagar project and some INR 4 crore from the CESC one. But not everyone is happy at what they see as the “arbitrariness” of the sanction procedures.

“On the one hand, illegal conversion of industrial land has been going on for many years. And on the other you have these tough sanction procedures, which will drive up the cost of the project. The government should first look at a machinery to check corruption,” says Sanjay Bajoria, a leading real-estate developer.

The government's defence is that not all proposals are tailored to fit the law, and that as long as a proposal has some element of industrial development woven into it, the logic can be created for its approval.

Says Das, “You can call it arbitrary or you can see it as the outcome of bargaining, which can never be equal. In a sense, arbitrariness is inevitable.”

For the government, that's a significant change in rhetoric from a few years before. And for now, developers
are satisfied.

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