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Bill to help govt buy land for PPP projects

Land Bill to be taken up by Cabinet contains list of 29 infra areas with public purpose.

By defining ?public purpose? very broadly in the relevant legislation, the government will ensure private investors in state-controlled infrastructure projects almost always receive its help in mobilising the land required.

The land Bill vetted by a group of ministers earlier and set to to taken up by the Union Cabinet after Diwali will contain an exhaustive list of 29 infrastructure areas as involving public purpose. This means that the government can acquire land for public-private partnership (PPP) projects in these areas, provided the projects are majority-owned by the government and two-thirds of the land owners give their consent. Such public-purpose PPP projects are also eligible for some concessions from state governments, which could reduce the cost of acquisition.

PPP projects driven by private companies, however, will have to fork out more for land and will require to get consent of 80% of the landowners. The rehabilitation and resettlement policy would be tougher in their case and no government help would be forthcoming in acquiring land.

The list of public purpose projects include development of roads, bridges, ports, airport, urban public transport, telecommunication towers, three-star hotels, hospitals and educational institutes, among others.

Sector analysts welcomed the clarity provided by the exhaustive list of infrastructure projects for public purpose. Anshuman Magazine, chairman and MD of CB Richard Ellis, however, said: ?Despite this, more clarity is still needed because land acquisition in India is tough and fragmented ownership is a major issue.?

Analysts also point out that as most of the land suitable for infrastructure projects will be outside urban areas, where the market rate is lower, the compensation component will also be comparatively lower.

As per the Land Acquisition, Rehabilitation and Resettlement (LARR) Bill cleared by the group of ministers headed by Sharad Pawar last month, the government can acquire land for state-controlled public-purpose PPP projects with the consent of 67% land owners. For projects driven by private companies, however, the developers need to go for direct acquisition of land, which could involve several hurdles. If a private entity acquires 100 acres or more (in rural areas) and 50 acres or more (in urban areas), it will have to ensure rehabilitation and resettlement and compensation as defined in the Bill. Though in both cases the compensation is supposed to be market-driven and defined as twice the market value in urban areas and four times in rural areas, in the case of state-controlled projects, concessions from the state government could reduce costs, apart from the relative ease in acquiring land.

The revised BIll, if cleared by the Cabinet, will bring cheer to private developers. A number of key infrastructure projects are stuck due to issues in land acquisition.

Examples include the Pune international airport at Rajgurunagar near Chakan, and five major road projects under the National Highway Authority of India spread over 1,771.642 hectares across 12 districts in West Bengal.

Pawar has already made it clear that there will not be a retrospective clause in the proposed Bill and it will come into effect from the day Parliament passes the LARR Bill. On the issue of using land acquired for one project for another, the rural development ministry is seeking the views of the law ministry as a recent Supreme Court judgment makes it clear that the leftover land acquired for a project cannot be resold and should be auctioned. This too is expected to bring cheer to private developers.

Other projects under the public-purpose clause include inland waterways, railway tracks, tunnels, electricity generation, transmission and distribution, oil pipelines, oil/gas/liquefied natural gas storage facilities, water supply pipelines, water treatment plants, sewage collection, treatment and disposal systems, irrigation (dams, channels, embankments, etc), among others.

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First published on: 03-11-2012 at 03:44 IST
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