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Land acquisition woes thwart India's mega refinery plan with Saudi Aramco

Reuters  |  MUMBAI/NEW DELHI 

By and Nidhi Verma

MUMBAI/NEW DELHI (Reuters) - At the International Energy Forum in Delhi in April, the world's top producer inked a preliminary deal to partner with a consortium of Indian players to build a $44 billion refinery and petrochemical project on

The huge project was touted as a gamechanger for both parties - offering steady fuel supplies and meeting Saudi Arabia's need to secure regular buyers for its Despite the obvious benefits, though, the prospects for the plan - in the works since 2015 - are growing dimmer by the day.

Thousands of farmers oppose the refinery and are refusing to surrender land, fearing it could damage a region famed for its Alphonso mangoes, vast cashew plantations and fishing hamlets that boast bountiful catches of seafood.

"We earn enough to fulfil our needs and we do not want to surrender our lands for a refinery at any cost," says Sandesh Desai, standing amid his fruit-laden mango orchard in Nanar, a village in district, some 400 km (250 miles) south of

Land acquisition has always been a contentious issue in rural India, where a majority of the population depends on farming for their livelihood. In 2008, for example, India's had to shelve plans for a in an eastern state after facing widespread protests from farmers.

And while has tried to ease land acquisition rules to jumpstart delayed projects worth tens of billions of dollars, the government has faced resistance to amending populist laws enacted by his predecessors.

Like Desai, a majority of the farmers from 14 villages around that need to be relocated for the refinery project firmly oppose the plan, a told

Opposition politicians and even a ally of Modi's (BJP) support the movement, complicating matters further for the government ahead of state and in 2019.

The state government, which is responsible for acquiring the land for the project, has so far failed to secure even one acre of the roughly 15,000 acres needed for the refinery, Industries told

"The state is not going to acquire land as a majority of the farmers are against the plan," said Desai, the minister, who is a member of the Shiv Sena, a regional party allied with the BJP in the Under land acquisition rules at least 70 percent of the land owners need to provide consent for a project, he said.

Still, some believe that the opponents are only objecting to get better compensation packages for their land.

"Eventually all stakeholders will give their consent, but it will take time," said Ajay Singh Sengar, who heads a rival forum that supports the refinery project. A government in the area said he thought many farmers would agree to a deal once a compensation package was announced.

JOB PROMISES

The Refinery & Petrochemicals Ltd (RRPL), which is running the project, says the 1.2-million-barrel-per-day (bpd) refinery, and an with a capacity of 18 million tonnes per year, will help create direct and indirect employment for up to 150,000 people, with jobs that pay better than agriculture or fishing.

But farmers say they have sufficient work in their orchards and fields.

"We don't have enough people to maintain our mango orchards. That's why every year we employ migrant labour from Nepal," says Arvind Samant, the of a farmers' and fishermen's group that was created to organise opposition to the project.

Samant says instead of a refinery the government should bring or other industries that suit needs.

RRPL, a joint venture between Indian Corp (IOC), and Bharat Petroleum, said suggestions the refinery would hurt the environment were baseless. It says it will continue to cultivate mangoes and cashews on some 4,500 acres of land around the project.

Despite the opposition, RRPL is hopeful the project will proceed.

"Some people misguided farmers and created fear. We're now trying to answer each and every doubt," said Anil Nagwekar, a for the RRPL, adding RRPL was struggling to convince farmers as they refused to even discuss the plan with the company.

Hundreds of people have joined non-violent protests, blocking surveyors from even measuring land needed for the site, said Omkar Prabhudesai, who heads the local group opposing the project.

"There is no point in listening to the company's views. We have already decided not to give our land," said Prabhudesai.

FAINT HOPES

The refinery, announced in 2015, was to be commissioned by 2022, but delays in land acquisition mean the deadline is likely to be pushed back.

"Ideally the should have acquired land by now and the work for the project should have started. The delay could impact deadlines," said RRPL's Nagwekar.

declined to comment, while India's did not respond to a email seeking comment.

Even if the government wanted to implement the project, it would not start any land acquisition process before elections in 2019, conceded a senior state government official, who asked not to be named due to the sensitivity of the matter.

"political mileage every political party is opposing the project. For the next one year there won't be any progress," the said.

Workers of the Navnirman Sena (MNS), a regional party, vandalised offices of RRPL in in April.

An MNS confirmed reports of the incident and said the party was strongly opposed to the refinery plan. Parties like the Indian National Congress, and the also oppose the plan.

Still, some officials remain hopeful.

Building a large project such as this in was possible, but could take years, said IOC's

"We conceived the project in 1994," he said, referring to a plant it runs on the "But for various reasons the project got delayed and it was finally only commissioned in 2014."

(Reporting by and Nidhi Verma; Editing by and Alex Richardson)

(This story has not been edited by Business Standard staff and is auto-generated from a syndicated feed.)

First Published: Thu, May 17 2018. 20:01 IST
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