IF this government has a record of a weekly scam breaking out in the news media, this week’s financial scandal takes the cake. The Union Shipping Ministry has leased out 16,000 acres of Kandla Port Trust land to private individuals for a paltry sum of Rs149 per acre while the land is now worth a stupendous Rs two crore per acre.
On the other hand, the Posco’s case in Orissa is no different. Real estate developers involved in township or SEZ development often say that the cost of land is the biggest component of the project cost. Some times in places like Mumbai the land cost is over 85 per cent of the real estate development project cost! But Posco has not even spent two per cent of the project cost in the land acquisition for the steel plant in Orissa.
Posco India’s proposed investment in the steel plant at Jagatsinghpur is the highest ever foreign direct investment (FDI) in India. The plant will manufacture 12 million tons per annum. This ostensibly will provide extensive value addition to the mineral wealth of Orissa and also put India on the map of global steel manufacturers.
Posco is expected to invest $12-billion (Rs 51,000-crore) for the 12 MTPA fully integrated steel plant in Orissa with the latest technology known as Finex. There are about 700 farmers who are project-affected people, and who have been crying hoarse for over a year over displacement and inadequate compensation. Even if the company spends Rs one-crore on each farmer the cost of the land acquisition will not cross the two per cent project cost mark.
The fault lies in the land acquisition law which was passed by the British in 1894. The law is quite brazen about acquiring land for “public purposes’’. The law does not specify that the value of land should be marked to market. To be fair, a century ago there was no need for market estimation of land as population density was low, land was abundant and private projects were not so large.
The latest scam involving the Kandla Port Trust could be even bigger than the 2G scam involving former Union Minister A Raja or the CWG scam involving Suresh Kalmadi. Kandla Port Trust with 2.44-lakh acre has the largest land bank among all ports in the world. Highly placed officials of the Kandla Port Trust were found to be playing hand-in-glove in distributing large tracts of land to private parties over the years causing almost inestimable loss to the exchequer. The leasing of 16,000 acres to salt manufacturing firms from the Kandla Port Trust area for Rs149 per acre is almost unheard of in modern times. The case is now being heard in Delhi High Court.
Predictably, as with all the financial scams of this government, the trail of money goes all way to the top of the Union Shipping Ministry. The Shipping Minister GK Vasan squarely blamed the cabinet secretary for the mess and washed his hands of the growing evidence of sleaze and sweetheart deals in his ministry.
If Prime Minister Dr Manmohan Singh admitted that his government is now known to be the most corrupt it is only adding another proverbial feather in the cap.