India Real Estate Link

The plans of India’s leading private sector company by market capitalization, Reliance Industries Ltd (RIL), to create special economic zones (SEZs) at Jhajjar and Gurgaon in Haryana give the impression to have run into problem over issues related to land acquisition, with land owners in the area demanding around three times the amount the company is prepared to pay because land prices have increased since late 2006, when the company made its offer.
“We require around 25,000 acres for our SEZs. While we are in possession of around 9,500 acres, the owners of the left behind land are demanding around one crore rupees per acre, which is above the notified rates (the rates fixed by the company) of approximately thirty eight lakh rupees per acre (including annuity). This is a huge problem for us,” said an RIL executive, who didn’t wish to be named because he is not authorized to speak to the media.SEZs are industrial enclaves that come with fiscal and other benefits. Companies wishing to set them up have to take an initial approval from the government, acquire the land, and then have the SEZ “notified”, which means the units based there are eligible for the fiscal benefits.
RIL had initially planned one SEZ at Jhajjar, but after the government capped the size of such zones at 12,500 acres, the company decided to create two nearby SEZs.
The company’s other SEZ at Raigad in Maharashtra has run into trouble over the rehabilitation and resettlement package announced.
The Haryana SEZs are expected to require an investment of Rs25,000 crore and have provisions for a cargo airport and a 2,000MW power plant.
The land acquisition rates offered by Reliance Haryana SEZ Ltd, the company formed by RIL to develop the SEZs, is twenty two lakh rupees per acre and thirty thousand rupees per acre as annuity for a period of 33 years, resulting in a total payout of thirty eight lakh rupees per acre.