Haryana project stuck with land in patches

GURGAON: Mukesh Ambani’s ambitious 25,000-acre multi-product SEZ project in Haryana now faces an uncertain future. Reliance Industries (RIL) — which had acquired almost 11,000 acres over the last few months — now runs the risk of facing fresh hurdles, both with regard to the role of its joint venture partner Haryana State Infrastructure & Industrial Development Corporation (HSIIDC) and its ability to meet contiguity norms.

While the EGoM on Thursday imposed a cap of 12,500 acres for a single applicant, it has also said that states will not be involved in land acquisition for SEZs. Joint ventures of private players with government agencies, where land is the basis of equity sharing, will not be allowed. Moreover, only such projects will get a go-ahead that have a contiguous land. RIL’s Jhajjar SEZ appears to be in trouble on all the four counts.

While the project size will now be halved — RIL will have to cut down its proposal to just 12,500 acres — it will no longer be able to rely on HSIIDC to buy the remaining land. As is the case, HSIIDC was planning to buy land from farmers that would enable RIL to meet the contiguity norm. RIL had floated a separate SPV in a joint venture with HSIIDC for the project, where HSIIDC was to contribute 25% land for a 10% sweat equity.

HSIIDC’s role in the JV, therefore, may now be in question and the Centre may not allow such a collaboration as it is based on HSIIDC’s assurance to provide a part of the land. The EGoM has made an exception for such JVs only if the state government or the state agency are already in possession of the land. This clearly is not the case in the Jhajjar SEZ. HSIIDC officials are tightlipped on the issue, only saying, “The affair is extremely confusing and a macro debate will have to be initiated to get clarity.” When contacted, an RIL spokesperson declined to comment on the development.

Although RIL has acquired large tracts of land, it has not been able to strike contiguity as the area includes several patches of land that are still owned by local land owners. It was hoped that HSIIDC as a government agency would be able to play a crucial role in acquiring the patches as state governments are empowered under Sections 4, 6 and 8 of the Land Acquisition Act to intervene and acquire land for public utility. However, under the new decision by the EGoM on Thursday, state governments or state agencies will not be allowed to acquire land.

As per RIL’s original MoU with the Haryana government, the company was supposed to buy 17,500 acres directly from farmers, and the state was to give the remaining 7,500 acres. Further, the state was to release its contribution only to help the company achieve contiguity, that too after the company had completed its share of the land acquisition.