Disappointed that a dispute over a relatively small stretch of land is delaying the start of the core infrastructure development in the Dholera Special Investment Region (DSIR), the Centre has written to the Gujarat government asking it to expeditiously sort out the issue. The state has also been told that pricing of the entire land for the project should be such that it remained viable.
The DSIR, conceptualised in 2007 when Narendra Modi was Gujarat chief minister, is a crucial component of the $90-billion Delhi Mumbai Industrial Corridor (DMIC). The Centre had given approval in May for developing trunk infrastructure components (including roads, services, building complex and plants for water treatment, sewage treatment and common effluent treatment), part of the first phase. But a land dispute that reached the courts and the “high” price at which the state wants to transfer the required land to the DSIR special purpose vehicle (SPV) have prevented the project from taking off, official sources told FE.
The Centre-owned DMIC Development Corporation (DMICDC), via the DMIC Trust, will be investing Rs 2,785 crore as equity in the DSIR SPV, while the state’s equity will be the land, hence pricing is important.
In a recent letter to the state, the DMICDC and the department of industrial policy and promotion (DIPP), also told the state to get a clarification from the Gujarat High Court — which is hearing the land dispute — that there is no stay on the entire project. The sources said since the dispute is only over a small portion of the activation area of 22.5 sq km demarcated for the trunk infrastructure, alternatively, the DMICDC and the DIPP also advised the states if it could a legal opinion to the effect that work could begin in the larger unencumbered portion of the land.
Unless these issues are sorted out, it will not be possible to issue the tenders for the trunk infrastructure, the sources said, adding that the Centre is keen to see that the tenders are awarded this fiscal itself and that the work commences early next fiscal. As per an earlier schedule, trunk infrastructure was to built by end-FY19, but that already looks tough.
Sources from the state government, however, told FE that the disputed area is only around 40-50 hectares, which some locals are “wrongly claiming as private land”. They said the state has moved the court challenging the process by which the locals have obtained the “private”tag to the land. The sources added that they will soon intimate the Centre that no stay order from any court existed on the construction work in DSIR.
The total area earmarked for DSIR is 920 sq km, of which the developable area is around 567 sq km. It will also have an airport and seaport for boosting exports. DSIR — which will have the logistic support of the dedicated freight corridor coming up within the DMIC — will also enjoy proximity to the proposed the Gujarat International Finance TechCity, Petro-chemicals and Petroleum Investment Region as well as cities such as Ahmedabad, Bhavnagar and Vadodara.
The project ran into trouble when the Gujarat High Court in July issued notices to the Centre and state government on a public interest litigation filed by some residents of villages in Dholera and a farmers’ association challenging the legislation enacted by the state for the DSIR, the SIR Act, 2009. They alleged that the act empowers the state government to acquire farmers’ land in the name of town planning without dealing with the issue of compensation in totality. The legislation also violates the constitutional provisions by restricting the powers of the local panchayat, they alleged, but this charge has been denied by state government officials. The court has not taken a final decision on the matter.
Landing in trouble:
* Total land area earmarked for DSIR is 920 sq km, of which 567.39 sq km is “developable”
* DMIC’s equity investment in DSIR-SPV is pegged at R2,785 crore
* State to provide land as equity; high land cost could hit project viability: Centre
* Trunk infrastructure was to be completed by FY19, but it looks tough now
* Work hasn’t begun so far due to land-related issues and litigation