Vinayak Chatterjee: The soft underbelly of infrastructure

INFRATALK

As India pushes ahead aggressively on infrastructure development, land acquisition and rehabilitation & resettlement are finally getting the attention they deserve.

The traditional view of infrastructure is 'hard' asset building. Bricks and mortar. Steel and cement. The two softer sides are more often than not forgotten. LA (land acquisition) + R&R (rehabilitation and resettlement), to start with, and O&M (operation and maintenance), to live with.

LA + R&R once again moved centrestage as the SEZ fever gripped the country, Narmada Dam wounds refused to heal, and the R&R activists "" Medha Patkar, Mamta Banerjee et al were beamed across television channels.

The administration of LA and R&R in the country has been burdened with archaic and cumbersome procedures, ineffective land record and administration systems, exclusion of impacted but unclear titleholders from R&R benefits, and confusion among policies and procedures followed across states and sectors. Add to this, inadequate public information on entitlements and processes, and limited capacity of implementing agencies. No wonder, the outcomes are increased litigation, time and cost overruns, inequity and lack of transparency. Compounding factors include the politics of posturing, role of professional activists, and often, negative attitudes towards private investment.

Historically, LA has progressed from 'eminent domain'-led 'non-market' types of acquisition by the state to market-led compensation, then to mitigation, and now finally, to sustainable development for those affected. In the process, various mechanisms have evolved to address R&R. These are broadly classified as below:

Public Goods: Uniform formula-driven compensation for those displaced, often through sheer state power.

Club Goods: Compensation for whole communities such as provision of apartments for slum rehabilitation; or in the case of mining projects, revenue transfers to local authorities.

Individual Goods: Creation of streams of personal incomes through alternative employment or side-business opportunities.

Private Goods: Market-linked 'upside benefit sharing of new projects'. (The Cybercity Magarpatta project near Pune, for example, being set up at a cost of Rs 850 crore, is actually a cooperative effort of 120 farmers who pooled their ancestral land to create a 400 acre space. Each of the 120 farmers is a shareholder "" in proportion to his land holding "" in the company that owns the Magarpatta City.)

In attempting to grapple with these new formats, serious issues are surfacing. They relate to:

Government acquiring land or 'facilitating acquisition' for a private developer using arguments of 'public good'

What constitutes 'public good'?

What really are the kinds of powers vested with state governments as per the legal framework of the Land Acquisition Act of 1894, which itself emerged out of the Bengal Code Regulation 1(1824), and then amended in 1984?

How fairly and transparently is the government machinery using the right of 'eminent domain,' which is at the heart of the LA Act?

How much of LA and R&R costs must be included as part of 'official' project costs? In urban areas, R&R costs can be as high as 30-40 per cent of the project cost (slum rehabilitation) or sometimes as high as 8-10 per cent in highway and railway projects.

Also germane to the discussions are two sociological dimensions:

Most often, the land being transacted is rural land, (not always agricultural tracts) and, therefore, the power and knowledge equations of the buyer and seller are asymmetrical. Project-affected persons are usually not aware of their rights.

Large-scale acquisition of land comes with its share of adverse impacts on the social fabric of the region. Though not always displacing people from their homesteads, it sometimes affects the availability of community land such as forests, grazing lands and so on, thereby upsetting village social networks and limiting access to natural resources that form the base of rural economies. Rehabilitation, if not resettlement measures, therefore, assume the greatest importance.

Not too long ago, in February 2004, the government promulgated the "National Policy on Resettlement and Rehabilitation for Project Affected Families." Within two years' time, the government was forced to issue a Draft National Rehabilitation Policy 2006 (DNRP 2006). In doing so, the government had to acknowledge that the "experience of implementing this policy indicates that there are many issues addressed by the policy which require to be reviewed."

Critics of this new draft point to:

The affected persons not having the right to be consulted prior to the finalisation of their lands as the project site.

Not providing for the inclusion of the affected persons or their representatives while conducting EIA/SIA (Environment/Social Impact Assessment).

It is instructive to quote from the preamble of the DNRP 2006 wherein it recognises "traumatic, psychological and socio-cultural consequences on the displaced populations which calls for affirmative State action for protecting their rights," and the need for "the active participation of affected persons."

In seeking to achieve these objectives, the following five suggestions are worth considering:

Give statutory teeth to the provisions of DNRP 2006 in consultation with the law ministry so that there is uniformity and control over the implementing agencies.

Repeal the Land Acquisition Act of 1894 and then adopt a law which guarantees the rights of the displaced. A policy cannot override the law and in a country where there is disregard for laws, a policy cannot be of any help.

Allow private sector developers to follow best practices in R&R and capitalise, to the full extent, the 'official' definitions of project cost.

Introduce a system of independent 'licensed' valuers, as has been done in many other countries, including Thailand. There the government acquires the land under 'eminent domain' but the value of the land is decided independently.

It is common knowledge that there are several discriminatory factors when it comes to the implementation of R&R provisions across projects funded by multilateral funding agencies and in those that are funded by the government or the private sector. These differences should be removed.

R Chatterjee and her committed R&R team at Feedback Ventures strongly feel that good R&R practices are the crucial first steps on the ground that will lead to more 'inclusiveness' in our path to rapid nation-building.

Chak de India!

The author is the Chairman of Feedback Ventures. He is also the Co-Chairman of CII's National Council on Infrastructure. The views expressed are personal