Calcutta, May 31: For the first time in the country, a project promoter has offered shares in the company to owners of land to be acquired to set up the factory.
The Jindals, who will build a steel plant in Bengal with a capacity of 3 million tonnes in the first phase, today offered cash and stock to compensate 742 families from whom they expect to buy land at Salbani in West Midnapore district.
“I want to make each family giving land for the project a stakeholder,” Sajjan Jindal said after announcing the package.
Chief minister Buddhadeb Bhattacharjee, to whom Jindal made the proposal at a meeting today, might be greatly relieved by the news after being stung by a burst of bad publicity over Nandigram and yesterday’s setback in a civic poll near the troubled area.
“I think it is a good model. We will tell all businessmen who want to set up industries to look at it,” a smiling chief minister said.
He appeared, however, to be sceptical about the popularity potential of the model.
Under the scheme, each family will be paid the entire value of the land in cash and an equivalent amount in shares.
The cash component will have two parts — one half will be paid directly and the other will be placed in an annuity scheme to be managed by the Life Insurance Corporation that will hand the family a monthly income.
On offer is also a job for one member of the family in the project.
Sukhdeb Mahato, 52, who owns a three-bigha plot in the area and has a daughter studying law, reacted positively to the package.
“I don’t earn much from the land now. The annuity scheme will be very helpful,” he said.
The shares of JSW Bengal Steel Ltd, the company that will put up the project, will be held for the landowners in a trust under the district magistrate’s management.
When the company gets listed on a stock exchange closer to the start of production in 2011, the landowners will have the option to sell the shares.
“The shares are being offered at par at Rs 10 now. I think it will appreciate substantially when listed,” Jindal said.
Biswadip Gupta, who will head the Bengal project, said the company had been identifying the landowners for the past two months.
Of the land required, about 4,060 acres belong to the government that will be made available to the Jindals at a price of Rs 1.9 lakh an acre while 570 acres have to be bought directly from the farmer.
Jindal didn’t say that the inspiration for the idea came from Prime Minister Manmohan Singh’s speech recently at the Confederation of Indian Industry where he described “inclusive growth” as the priority of his government in its remaining two years.
IT industry organisation Nasscom’s president Kiran Karnik, a strong proponent of inclusive growth, welcomed the Jindal model and revealed that in an upcoming IT park in Pune, landowners themselves had formed a co-operative and teamed up with a developer.