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Bengal farmers lap up Jindal Steel shares

June 04, 2007 11:05 IST

Sukhdev Mahato has 2 acres in the 450-acre private land, which will be acquired for JSW Bengal Steel's 10 million tonne project. And Mahato feels blessed.

"I will lose land, but will get company ownership," he said. He was referring to the recently announced compensation package by Sajjan Jindal, which entails giving free shares to people who lose land.

Parishkar Mahato has around 7 acres of two-crop land. He has read in the papers about the compensation package and has a few queries. "What is the valuation of the land and how much shares will I get for it?"

Sukhdev Mahato and Parishkar Mahato don't understand the relation between shares and the stock market, but are aware that the shares will translate into company ownership. That's what matters to them.

The talk in the village is not about firm commitment on jobs for at least one person per family losing land or the annuity policy with LIC or the cash, which are all over and above the free shares.

Shyam Pande, an influential person in the Salboni block said, "We have heard about job assurances before, but not shares. This is a novel package." But Pande is unhappy. "The project site just about skips my plot," he said.

The people see the shares as a long-term asset because they feel the cash from compensation will be spent in no time. Around 741 families would lose land.

A glimpse of the project site shows that the reaction to the package is not surprising given that the income from the land is Rs 3,000-4,000 per acre in a year. Of the 450 acres of private land, around 90 acres is agricultural land, of which 30 acres is two-crop land. The rest is barren and the average landholding is as small as 1-2 acres.The main crops grown are paddy and wheat.

The total land requirement for the Rs 35,000 crore (Rs 350-billion) project is 4,500 acre, inclusive of the private land. The balance is vested with the government. JSW will acquire 1,000 acres more for its township and airstrip, which will be owned by the state government.

The valuation for the land is being worked out by the state government, which will be complete by June 15. The prices will be according to classification of barren, one-crop and two crop land. Land purchase would start from June-end.

Biswadip Gupta, joint managing director and chief executive officer, JSW Bengal Steel, said, the land acquisition would be through in the next 2-3 months.

When enquiring about the kind of ancillary projects that could come up next to a steel plant, the officer on special duty from Midnapore Kharagpur Development Authority and JSW officials said an aluminium plant and a hotel would come up.

With talk about many such projects in the air, land prices are escalating. Prices along the NH60, 1.5 km from the project site have increased from Rs 50,000 acre to Rs 500,000 per acre now. No deals have happened but villagers are keeping their fingers crossed.

Ishita Ayan Dutt in Salboni