SREI chief says practical approach is key to resolving land, power, road issues
At a time when industry captains are batting for the Land Acquisition Bill 2015; Hemant Kanoria demands curb on acquisition of fertile farmland for industry.
In an interview to BusinessLine; the Chairman and Managing Director of the ₹3,400-crore turnover SREI Infrastructure Finance, says the practical approach is missing in the Centre’s move to resolve issues in land acquisition, coal block allocation, road and highways and power generation.
What is your opinion about the Land Acquisition Bill?
Land belongs to States. And, Act or no Act, politically it is difficult to take land from farmers. We have been suggesting to the Government since four years for detailed classification of barren, mono crop and multi-crop land. It could help differentiate between land owners and farmers.
Someone owning a patch of barren land is surely not a farmer.
At the peak of the Singur controversy in West Bengal in 2008-09, we (SREI) were buying (barren) land near Kharagpur for an industrial project, without any resistance.
We feel the creation of a legal framework, aided with rehabilitation and resettlement packages, to promote industrial development in barren and mono-crop land, is a practical solution.
Acquisition of multi-crop farmland may be allowed for constructing roads, irrigation canals, installing telecom and electricity towers, strategic defence infrastructure etc. But, industrial use of farmland should be restricted to agri-processing industries (like rice or sugar mill).
Let us first assure them that farmland will not be touched. More over, by directing industries to less fertile areas, we can create new livelihood options. But the bill proposes one formula for all.
The Centre wants to reduce the threshold for taking consent of land losers in case of private and PPP projects. What about misuse of provisions by the private sector?
Not just the private sector, even the Government can misuse it. Whatever the new amendments are, they can be applicable to barren or mono-crop land.
There is no reason why you need an automobile factory or a defence production unit on multi-crop land. Singur problem (Tata Nano fiasco), would not have happened if fertile farmland was not acquired.
Barren land generally suffers from inadequate infrastructure. Will it be suitable for industry?
That should be the responsibility of the States. They must get their acts together and create necessary infrastructure.
But isn’t the industry demanding freedom to invest in its choice of location, which is often near big cities?
Both the Government and the industry are not thinking practically. Why is there such a mess in the coal and power sectors? Because, everyone has ignored ground realities. We must realise that we cannot disturb farmers.
The Government has successfully auctioned captive coal assets. Do you still hold the opinion you earlier had, that a more efficient Coal India is the answer to energy woes?
I stick to the opinion that coal mines be owned by the Government or Coal India and mining be done by reputed contractors to enhance productivity.
I have strong reservations about the success of the coal block auction. It will push up production costs across the economy. Electricity tariff is bound to rise.
The auction was bound to be “successful” because bidders had already made substantial investments in power capacities and now want to fuel to keep it operational. They agreed to pay whatever it takes oblivious to the final cost, which they will eventually pass on to consumers. India Power was also a bidder to fuel the generation facility at Haldia (West Bengal) that will be operational from September. But, I asked my team not to go overboard.
Many power stations are idle due to weak demand for electricity. Will the availability of fuel will ensure their smooth running?
There will be buyers if the power tariff is affordable. Availability of fuel is not the only answer; it should be available at the right cost. India is blessed with vast coal resources and a consumption-driven economy. Availability of power at low cost holds the key to success of the Make-in-India campaign.
What are the solutions for the road sector’s woes?
There are simple solutions that people are unwilling to accept.
First, the Government must allow an exit route to those struck in existing projects. This will help entry of new players at lower costs. On new projects, instead of going for mega plans, road projects should be broken up into smaller packages of say ₹500 crore or ₹1,000 crore.