Putting Cart before the
Horse ?
An
article in Hindustan Times ( 24 Feb 2016 ) reports :
"
...the government has now asked Industrial Corridors to award infrastructure
and manufacturing projects only after the
bidding companies show they have acquired the land
needed "
I
presume that , at this stage , based on the bid amount ( and other qualifying
criteria ) , one bidder has been selected from among those who submitted bids ,
for a specific project to be located on a given piece of land , close to the
Industrial Corridor
But
the order ( award ) will not be placed till such time he produces " proof
" of having acquired the land , which could , well belong to a dozen
farmers !
Obviously
, no industrialist will buy a specific piece of
land in advance , from a dozen farmers , not knowing whether his bid
will succeed or not !
But
now that he has won the bid , he must approach those 12 farmers for the
purchase of the land and enter into serious negotiations
Since
the farmers " know " that an industrialist will approach them , ONLY if
he has won the bid , they are in a much better bargaining position !
They
can bargain collectively and quote a very high price - may be a price far in
excess of what the winning industrialist had budgeted for , in his bid !
The negotiations can take weeks or months to conclude an
agreement or may even fail , forcing the industrialist to back out of his
commitment
That
may require selecting the next ( highest ? ) bidder and repeat the process all
over !
The
whole idea of awarding only AFTER acquisition of required land was to speed up
the project implementation
But
in this idea, I see a danger of endless going
in circles !
WHAT IS THE SOLUTION ?
Consider
following excerpt from my email to Shri Nitin Gadkariji , on 23 March 2015 :
[ I think there is a
simple solution to the concerns expressed by the farmers . Please consider the
following :
*
Each project will be tied to a specific SPV , created for
that purpose only
* In the
first instance , affected farmers will create a " Cooperative Society
"
* Co-operative
Society will issue shares to each land-donor farmer , in proportion to the
QUANTITY / VALUE of the land donated by him
* In turn ,
Co-operative Society will receive shares in the SPV , equal to the value of the
land + a cash compensation equal to 4 times the value of the land
* Farmer's shares of
Cooperative Society cannot be sold in open market before 5 years but can be
gifted to wife / Children
* Shares of Cooperative
Society in the SPV itself cannot be sold for next 10 years
* The " Cash-Value
Compensation " received by the Co-operative Society ( ie 4 times the land
value ), will be deployed as follows :
* To be
immediately paid in cash to the farmers............ 2 times
* To be
deposited in the Jan-Dhan Account of each farmer as FIXED DEPOSIT ( with 10 @
interest )....2 times ]
Since each State is in
serious - and healthy - competition with other States to attract investments ,
those which offer an equitable and just solution to the farmers as well as to
the industrialists , will succeed
And there will be no need to
pass any Land Acquisition Bill in Rajya Sabha !
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www.hemenparekh.in / blogs
27 Feb 2016
hemen
parekh
Marol
, Mumbai , India
(
M ) +91 - 98,67,55,08,08
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