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Vibrant Gujarat's big ticket projects fail to take off

Due to non-availability of land, projects have either been scrapped or lying in state of limbo

Vinay Umarji & Rutam Vora  |  Ahmedabad 

Even as the sixth edition of Global Investors' Summit (VGGIS) is set to roll out on January 11, 2013, some of the big ticket projects committed during the previous two editions of the state sponsored mega investment events are yet to see the light of the day.

The projects that involved mammoth investment proposals include NRI businessman Prasoon Mukherjee's over Rs 80,000 crore worth of projects in sectors like shipping, ports, power and Special Investment Region (SIR), Hindustan Construction Company (HCC)'s waterfront city with an investment of approx Rs 40,000 crore, Hotmail founder Sabeer Bhatia-promoted Nano Works Developer's 'Nano City' at a cost of around Rs 30,000 crore, Jindal Power's thermal power plant worth Rs 11,000 crore and former bureaucrat-turned-entrepreneur, N Vittal-promoted Gujarat Vittal Innovation City (GVIC) with approximate cost of Rs 11,500 crore.

However, today, either some of them have been totally scrapped with the players moving to other states or lying in a state of limbo.

According to company officials and government sources, non-availability or delay in availability of land has been the primal reason. Prasoon Mukherjee's Universal Success Enterprise Ltd (USEL) had signed memorandums of understanding (MoUs) for over Rs 80,000 crore, which involved Rs 50,000 crore in power sector, Rs 30,000 crore in Dholera Special Investment Region (SIR) and another Rs 7,000 crore in ports and port-based sectors.


"We have not been able to acquire land for our projects. We are waiting for the same. Nothing more about the project status can be divulged at present," said Pradeep Kumar Modi, CEO and MD, Universal Crescent Power Pvt Ltd, a USEL group company.

Entrepreneurship and Management Processes International (EMPI) - a company chaired by former Central Vigilance Commissioner N Vittal faced similar fate over land acquisition for its unique special economic zone (SEZ) project, Gujarat-Vittal Innovation City (G-VIC). Vittal had planned to develop a global high technology innovation cluster on the same lines such as the Silicon Valley in the US or Hsinchu in Taiwan.

"The project is running in a lot of problems. We required 2500 acres of land, against which we were offered 300 acres. We had already identified land near Valsad in south Gujarat. But due to resistance from the locals, we were unable to acquire the required land," said Vittal adding that the project, however, had not been dropped despite land issues.

"We are implementing a part of this idea in Andhra Pradesh on about 300 acres of land near Anantapur district. We have not given up hope for Gujarat project but it may be located at some different location. Also, we would reconsider the idea and come up with a totally different project there," added Vittal refusing to share details on the new idea.

According to senior Gujarat government officials, the land that had been eyeing happened to be quite fertile. "The farmers didn't want to part with such a fertile land. And the government was not going to provide land directly. Hence, things did not materialise for in Gujarat and had to move to another state. On the other hand, the three companies HCC, Nano Works and USE were supposed to come up with their projects at different locations within the Dholera Special Investment Region (SIR) but nothing has materialised there too, as they are yet to buy land," said a senior government official.

As for projects announced by HCC, USE and Nano Works in the Dholera SIR, it was only in October 2012 that the final development report submitted by the Dholera SIR Development Authority (DSIRDA) got sanctioned. It was only after such a sanction, say government officials, that the three companies can buy land within the SIR.

The DSIRDA had much earlier in October 2011 offered around 2,366 hectares to the three companies within the region which they could purchase only after the development plan was sanctioned.

"However, they are yet to get back to us. They have been given a deadline of January 31, 2013 before which they are supposed to make payment for the land. Moreover, they are supposed to begin work on the project within a year. Failure to meet the payment deadline or commencement of work will result in forfeiture of the land by DSIRDA," said KD Chandnani, chief executive officer of DSIRDA.

Besides several other power projects, Jindal Power's thermal power plant projects too met with the similar fate. "We are still scouting for the required land for the project," said an official at Jindal Power, declining to be named. The company had signed an MoU with an intention to invest close to Rs 11,000 crore for setting up power project.

Recognising the difficulties faced by industries for land, Saurabh Patel, minister for energy and petrochemicals recently stated, "Land bank is an issue all over the country, including Gujarat," Patel said at an industry gathering in Vadodara on Thursday.

First Published: Fri, January 04 2013. 17:36 IST
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