At a time when big ticket investors are battling stiff resistance of locals to procure land for their projects, industrial players who have already been leased out land are not finding the going easy either.
With Odisha Industrial Infrastructure Development Corporation (Idco) disallowing mortgage of land for obtaining bank credit, the industries are unable to raise fund to push ahead their projects.
"It is now becoming increasingly difficult to tie-up funding for our projects. When land mortgage was being allowed for years together, it has been inexplicably stopped for the past few months. The government needs to take an immediate decision on the matter and re-allow mortgaging of leased land. Else, the industrial projects will be marred by delay”, said a senior executive of Jindal Steel & Power Ltd (JSPL).
Rajdeep Mohanty, resident director, Jindal Stainless Ltd said, “The government cannot afford to disallow land mortgage for obtaining bank finance. When an industrial player buys land, it is the first investment committed on the project. And, the leased land parcel has to be mortgaged to borrow money for the project.”An official of another steel firm feels Idco's step has been prompted by observation of the Comptroller & Auditor General of India (CAG).
"CAG had raised objections over Idco allowing companies, whom it had leased out land, to mortgage the asset to secure loans. The Central auditor had pointed out that Idco is not empowered to do so as it is not the owner of the land which belonged to the government. So the government approval was required for mortgaging of the land”, he said.
Meanwhile, a tripartite agreement involving department of revenue, Idco and the company to which land has been leased is in the process.
"The land mortgage issue was referred to the law department which in turn has suggested a tripartite pact. The pact will be similar to the model adopted by the Maharashtra government”, said an official source.