The Telegraph
Thursday , January 30 , 2014
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Corridor hits Bengal bump

Calcutta, Jan. 29: The ambitious eastern freight corridor has run into a tricky federal speed-breaker.

The Mamata Banerjee government is demanding market price for the land that the 1,839-km-long corridor needs in the Bengal stretch while other states have settled for the lower traditional rates.

The eastern leg, a key component of a dedicated freight corridor aimed at connecting the four metros in the country, will run between Dankuni in Bengal and Ludhiana in Punjab.

In Bengal, a total of 427 hectares will be required to lay rail tracks of 203km for the corridor, of which 37 hectares belong to the state government.

The size of the land is not much but the railways fear that if the demand for market price is accepted, it will set a precedent and trigger a chain reaction across the country that will make public-purpose projects more expensive.

If the issue is not resolved, fears have been expressed that the railways might be compelled to terminate the project at Jharkhand and steer clear of the Bengal stretch.

Under the usual procedure, government-owned land is transferred to central agencies for public-purpose projects in exchange for a capitalised value — which works out to between 2 and 4 per cent of the current market price. Capitalised value of a land parcel is a token amount that the Centre gives to the state to make up for the revenue losses caused by the transfer of the land.

But the Bengal government has asked the freight corridor entity to pay the market price for the land under its possession.

The state can try to justify its stand by contending that it is trying to maximise gains for the government. However, for the national highways, government-owned land was transferred to the Centre against the payment of capitalised value.

The same formula was not considered for the freight corridor project, which has prompted suggestions that the reason could be political rather than economic.

Adhir Chowdhury, who controls one of the few remaining Congress holdouts against the Trinamul Congress in Bengal, is now the junior minister for railways. The antagonism between the chief minister and Chowdhury is well known.

“The chief minister is not expected to allow her arch rival to seek credit for taking the project forward,” an official said.

The seeds for the project were sown in April 2005 when India and Japan made a joint declaration for feasibility and possible funding. In May that year, an infrastructure committee set up a task force to prepare a concept paper on the Delhi-Mumbai (western) and the Delhi-Howrah (eastern) dedicated freight corridor projects.

In January 2006, the cabinet approved the report of the task force and the cabinet committee for economic affairs gave “in-principle” approval to the feasibility study. In October, the Dedicated Freight Corridor Corporation of India Ltd (DFCCIL) was constituted to undertake the project.

Caught unawares by Bengal’s demand, railway authorities in Delhi have officially communicated their concerns to the state government.

“The state government is insisting on including land vested to the state under the provisions of Section 20A of the Railway (Amendment) Act, 2008…. In all other states, government-owned land is kept out of the provisions of Section 20A,” R.K. Gupta, the managing director of DFCCIL, has written to Bengal chief secretary Sanjay Mitra.

Through Section 20A, the railways declare the intention to acquire land from the public for a special project. Land with the government, however, is passed on to the railways by means of a transfer, said an official.

“Meetings between the state and DFCCIL are held at regular intervals to monitor the progress of land acquisition…. DFCCIL tried to convince the state that the demand was unjust, but the government has not budged,” said a senior land department official.

The market price for the 37 hectares has not been settled yet. Senior DFCCIL officials conceded that the price for 37 hectares would not be much. But, they added, their hands are tied as accepting the demand of the Bengal government will set a precedent that will be cited by all states when other public-purpose projects are taken up in the future.

Senior government officials said that if the tussle over the price of government-owned land was not sorted out soon, Bengal would suffer the most as the rail authorities might not bring the corridor up to Dankuni and it could be terminated in Jharkhand.

“The terminal point of a freight corridor can act as a port and give the economy a big push,” said an official. He added that the economy of Bengal would gain in many ways, ranging from attracting industrial and infrastructure investments.

“Bengal is finding it difficult to attract investments in faraway places like West Midnapore, Bankura, Birbhum and Purulia, where land is available but lack of connectivity because of poor infrastructure has become a roadblock,” said an official.

The official said that as Dankuni is connected with these districts through NH2 and NH6, the freight corridor could give a new lease of life to these places that have so for stayed off the investment map.