Industrialists say they were bowled over by the West Bengal chief minister's 'charm and simplicity'. The question is whether this will translate into projects on the ground
Forty-five corporate honchos and bankers are hardly a rare sighting for any chief minister's meet these days. But when the host is West Bengal's doughty Mamata Banerjee, whose immediate credentials before the historic victory in Bengal's 2009 Assembly election was driving away the Tata Nano project from the state, it makes headlines.
Among the galaxy of stars from India Inc, the brightest was Reliance Industries' Mukesh Ambani. The others who shone were: Godrej Group Chairman Adi Godrej, JSW Steel's Chairman And Managing Director Sajjan Jindal, RPG Enterprises' Chairman Harsh Goenka and ICICI Bank's Managing Director and Chief Executive Officer Chanda Kochhar. The Tata group was represented by TCS Managing Director N Chandrasekharan.
Going by the tweets of Trinamool Congress' Member of Parliament Derek O' Brien: Mukesh Ambani said, "Forty-eight hours after a big election victory [in this case, the panchayat elections] you are here in the business capital. That means you mean business." Again, via an O'Brien tweet, ITC chairman Y C Deveshwar said, "Chief Minister, you have won the day... Mukesh has committed, so many more will follow."
Perhaps, but the point is that Ambani has a specific interest in Bengal, which is Haldia Petrochemicals Ltd (HPL), eastern India's biggest petrochemical company, producing 3.5 million tonnes of polymer.
Reliance Industries has submitted its expression of interest for the state government's 40 per cent stake in HPL, which is a joint venture with Purnendu Chatterjee's TCG. The others in the race are Cairn India, Essar, Indian Oil Corporation, GAIL and ONGC. Due diligence is underway currently.
Obviously, Ambani means as much "business" as Banerjee. HPL is important for Ambani; if sold to an integrated energy player or a promoter with deep pockets, it could become a significant threat to the near-hegemony that RIL enjoys in the petrochemical sector, unless of course, it continues to be mired in problems under the new promoter, as it is now.
Moreover, Ambani's expression of interest has cut across regimes. In 2006, Ambani came down to meet Banerjee's predecessor, Buddhadeb Bhattcharjee and said, "I will come, if you want." An enthused government, however, explained that its hands were tied by an agreement with TCG for the first right of refusal on its shares.
Industry minister Nirupam Sen even made a trip to the Jamnagar facility to figure out how RIL could change Bengal's economic horizon, not just through HPL. But the relationship couldn't be taken to a logical conclusion, courtesy the right of first refusal with Purnendu Chatterjee.
Most of the others who were present for Banerjee's meet have some interest in Bengal. Jindal, is setting up a 10-million tonne steel plant at a cost of Rs 35,000 crore, which is delayed due to run-ins with the state government. The government claimed that JSW Bengal Steel had violated rules under the Land Reforms Act, by not seeking prior exemption under Section 14Y. The Land Reforms Act of 1955 places a ceiling of 25 acres on land acquisition while Section 14Y exempts the ceiling. Finally, the government vested the private land acquired by JSW with it and leased it to the company. Other issues came up such as forest clearance and iron ore linkages. Though the company had signed a development agreement with the earlier government in 2007, Banerjee's government wants it to sign a supplementary agreement with the company, which is still pending.
An emphasis on renewables, smaller cities and decentralised power grids is essential