Major ports could soon lose their powers to lease out land without auction. Shipping minister G K Vasan has directed his officials to revise the existing land use policy that gives the managements of major ports freedom to lease out land below market price.
Leasing of land is a matter of concern as port managements can lease it out for as long as 99 years in some cases, and any wrongdoing in fixing the lease rent can be financially detrimental to the public exchequer.
All major ports ? 13 of them ? have a combined land asset of 2.58 lakh acre at their disposal. Of this, up to 20% is not in use and could be leased out.
Sources in the ministry told FE that Vasan wants lease rent determined on the basis of market price of the land which is ascertained in a ?transparent? manner. ?The minister has told his officials to ensure that lands with ports are leased out only through auction. The officials are working on it,? one of the sources said. However, shipping secretary K Mohandas said, ?There is no proposal to revise the land use policy.?
The move has been triggered by unearthing of a land lease scam at the Kandla Port Trust, which could have caused a loss of up to R2 lakh crore to the public exchequer. The Central Bureau of Investigation is inquiring into the alleged scandal in which involvement of an official of the shipping ministry is suspected.
In the said scandal, Kandla Port authorities had allegedly leased out 16,000 acre of prime land to salt manufacturers at a paltry sum of R149 an acre as rent in 2004, which was way below the market price. Kandla Port has land area of 2.2 lakh acre, maximum held by any single port in the world.
The existing Land Policy, 2010, says land in custom-bound area is to be leased out either on ?scale of rates? approved by ?competent authority? or land rate in adjacent areas of the concerned port. But it is difficult to ascertain whether the rate so determined is current market value or not. The minister wants a transparent auction to be carried out to know the market rate of land in every case, sources said.
The land use policy also says land should normally be leased through a competitive bidding process and the reserve price of such plots shall normally be 6% of the market value of the plot. However, it empowers port management to reduce the rate in specific cases, depending on the circumstances. The management can also allot land to government departments, central public sector enterprises or private parties on nomination basis. In some cases, the port at its discretion may decide to grant a fresh lease in favour of the existing lessee without public auction or tender.
In a report tabled in Parliament on August 11, Parliamentary Standing Committee on Transport, Tourism and Culture ? headed by Communist Party of India (Marxist) leader Sitaram Yechury ? also asked the government to come out with a clear-cut policy for proper utilisation of port land. ?Every effort should be made to protect the land of port from encroachment,? it said.
