The Tamil Nadu government has agreed to help Tata Steel [Get Quote] procure nearly 10,000 acres of land for its Rs 2,500-crore (Rs 25 billion) titanium dioxide project in Tuticorin district, 540 km south-west of state capital Chennai.

This is the first time the state government has officially said it will get involved in the land acquisition process for Tata Steel's ambitious project, which has been on paper for nearly a year.

Tata Steel has been able to do little to see the project off the ground since signing the memorandum of understanding with the state government in June 2007 because it could not acquire the land on its own.

Senior government officials said though the state would not directly buy large tracts of land on behalf of the steel major, it would ensure that the acquisition process was smooth for Tata Steel to do so on its own.

"We have already instructed district collectors and other revenue officials to make sure that clear title deeds were made available for the company to approach legitimate land owners. We will also help Tata Steel by buying small bits of land to let them aggregate continuous land area of 10,000 acres (for mining)," said a senior state official.

Tata Steel had earlier indicated that it may look at alternative locations like Orissa and Andhra Pradesh to relocate the project owing to delays over land acquisition. Tata Steel officials, however, added that such a drastic move would be taken only after extensive negotiations with the Tamil Nadu government.
"We had committed ourselves to bringing this project to Tamil Nadu and will try to honour it as much as we can," a senior Tata Steel executive said.

The land acquisition process was also caught in political crossfire as powerful local interests in Tuticorin had objected to the project with some even claiming that Tata Steel was trying to buy agricultural land.

The state government had then dismissed these charges and said that less than 4 per cent of the land area where Tata Steel proposed to mine came under agriculture. The state continues to support this stance.