A recent incident of a prime land earmarked for special economic zone in Durgapur being re-leased to a private real estate firm has created a sense of disbelief and surprise among the local Durgapur residents.
The Asansol-Durgapur Development Authority (ADDA) has granted permission to the real estate company, Shapoorji Pallonji Group to build houses on a part of a plot leased out to the company to set up an information technology special economic zone (IT SEZ).
Bengal Shapoorji Infrastructure Development Pvt. Ltd was given 25 acres on a 99-year lease in 2008 by the then Left-dominated ADDA to build an IT SEZ. But the project did not take off because of the global economic downturn.
According to the agreement in 2008, Bengal Shapoorji was given the land at a subsidised rate of Rs 50,000 a cottah against the then commercial price of Rs 1.5 lakh a cottah, so as to gift a boost to the economy of the region. The 25 acres that cost Bengal Shapoorji Rs 7.5 crore in 2008 are valued at Rs 75 crore in the commercial market now.
A clause in the 2008 lease agreement said that if the company failed to build the SEZ in five years, it would have to pay a penalty of Rs 5 lakh a month. This clause was incorporated so as that the leased land doesn’t get mis-utilized.
A minutes of an ADDA meeting, held on September 12, this year mention that Bengal Shapoorji could not make the IT SEZ in five years because of the global meltdown.
Subhodip Payen, the coordinator for Bengal Shapoorji for the project, said over phone from Kolkata: “We appealed to the ADDA that we failed to construct the IT SEZ because of the slump in the IT sector and to make the project viable, it is required to go for housing projects and commercial establishments on some portion of the land. We will construct the IT Park on the rest of the land.”
He added: “We did not pay any extra money to ADDA other than the Rs 7.5 crore we have paid in 2008 at the time of agreement.”
Under the new proposal, apartments will be built on 12.5 acres and an IT park on the rest of the land. Around 10 per cent of the flats in the low income and middle income group brackets will be sold to the public through lottery at government-approved rates.
Economic compulsions and lack of investors have forced revisions of profiles of projects executed by others in Calcutta, too, including when the Left was at the helm of the Calcutta Municipal Corporation, but not without paying the difference money.
Opinion had been voiced then that a controversy-free process would have been to re-tender the land to provide a level playing field to all investors, some of whom may not have found the project viable if it was limited to an IT SEZ. The Trinamool-led Bengal government is opposed to SEZs.
The minutes say that after discussion with the current ADDA dispensation, which is now Trinamool-dominated, Bengal Shapoorji sought denotification of the IT SEZ in 2013 and came up with an alternative proposal.
ADDA has agreed to the mixed use of the land and the new proposal given by Bengal Shapoorji. ADDA chief executive officer S. Gupta said the authority could not take the land back as it was already registered in the name of Bengal Shapoorji.
“We have told them to keep at least 10 per cent of the LIG and MIG flats reserved as per the West Bengal Housing Board guidelines,” Gupta said.
The price for an LIG (578sqft) flat has been set at Rs 7.16 lakh with mandatory two-wheeler parking entailing an additional Rs 25,000. An MIG (965sq ft) flat is expected to cost Rs 20.5 lakh, along with compulsory covered and uncovered four-wheeler parking for Rs 2-2.5 lakh.
The price of the HIG flats will be at the sole discretion of the company. The current market prices for an HIG flat, along with parking space, in the area range between Rs 32 lakh and Rs 38 lakh.
Asked about the earlier agreement clause of a penalty of Rs 5 lakh per month if the project is not completed on time, the CEO said: “I am not exactly aware of that clause. I will go through the agreement in detail.”
Current ADDA chairman and Trinamul MLA Nikhil Banerjee said an IT park would cover half of the 25 acres.
He said the SEZ was “de-notified and the company said that setting up an IT park alone will not be economically viable. So, we allowed the company to use half the land in a mixed manner, including real estate,” Banerjee said.
CPM MP and former ADDA chairman Bansagopal Chowdhury expressed surprise, asking how and why the new authority approved the application. “If they want to construct housing and commercial projects, the board will have to cancel the previous agreement and sell the land at the commercial price,” he said.