Land hurdles continue to be a sore spot for big-ticket greenfield investors in Odisha. Even the land bank, which boasts of over 150,000 acres in its pool, doesn't enthuse large investors given the lack of contiguous land.
Investors are set to be in a quandary after announcing ambitious intents at the recently concluded Make in Odisha 2018 conclave, its second edition.
Odisha drew Rs 4.19 trillion in virgin investments at the conclave. Buoyed by its success, the state government is eyeing to implement 75 per cent of the fresh investments over the next two years.
The conclave attracted 183 projects; 64 per cent of which fall in the greenfield category. The petrochemicals sector accounted for two of the biggest investors in value -- Haldia Petrochemicals and a Taiwan-based firm. Investments by the two total to over Rs 1.1 trillion. Each of the two projects needs sizable tracts of land, posing a challenge for the state administrative machinery.
"New greenfield investments are yet to submit intents. Their projects haven't reached the stage of land allotment. While we can easily make available land from the land bank for the small and mid-sized projects, allotment for the large investors would be time-consuming. We are thinking of an alternate mechanism to arrange land for the large-scale projects," a government official said.
An e-mail questionnaire sent by Business Standard to the Industrial Promotion & Investment Corporation of Odisha Ltd (Ipicol) remained unanswered till the time this report was filed. Ipicol is the state's one-stop agency for investment promotion and facilitation.
The state-owned land acquisition agency -- Odisha Industrial Infrastructure Development Corporation (Idco) -- is yet to transfer land to JSW Steel for a mega steel mill proposed near Paradip. The company had submitted its intent in the run-up to the inaugural Make in Odisha conclave hosted in 2016. The government has sanctioned 2,700 acres of land for a steel plant of 12 million tonnes to be developed in a staggered manner at an estimated cost of Rs 550 billion. Land, initially acquired for the now mothballed Posco steel project, is meant to be allocated to JSW Steel. However, landowners have opposed the erection of a boundary wall, claiming forest rights over the land.
Another notable large investor -- Indian Oil Corporation Ltd (IOCL) -- is still awaiting the allotment of additional land from Idco to complete the expansion of different units of its planned petrochemical complex. The complex is being developed around the site of its 15-million tonnes crude oil refinery, where the oil major has already sunk in Rs 350 billion. IOCL had asked for 2,290 acres more to commission the petrochemical units in February 2017. Investments in the planned units are pegged at Rs 517.79 billion.
"We are still keeping fingers crossed. Dialogue is on with the state authorities," an IOCL source said.
Historically, land procurement, primarily for mega projects, has stood as a roadblock to swift industrialisation in Odisha. Posco, the biggest FDI investor at $12 billion, and ArcelorMittal, which proposed a steel project of 12 million tonnes in Odisha, have confronted protracted delays in land acquisition. ArcelorMittal later walked out of the project listing land row as one of the key hurdles.
The state government is encountering the same land procurement hurdle even for planned manufacturing zones such as the Coastal Economic Zone (CEZ) proposed on the Dhamra-Paradip cluster and the National Investment Manufacturing Zone (NIMZ) at Kalinganagar, home to a cluster of steel units owned by the Tatas, Jindals and others. For CEZ, the central government is looking for 50 sq km of contiguous land. However, much of the land identified is held by private landowners and its acquisition is beset with trouble.
Even for the 1000 Mw integrated solar park, the state government decided to go for a cluster mode as the acquisition of 5,000 acres of contiguous land was not feasible.