Bengaluru: The Janata Dal (Secular)-Congress government’s decision to sell 3,666 acres of land in Karnataka at “throwaway prices” to Sajjan Jindal’s JSW Steel in Ballari district has triggered a controversy.
JSW Steel will have to pay just Rs 1.22 lakh and Rs 1.50 lakh per acre respectively to buy two land parcels of 2,000.88 acres and 1,666 acres in Toranagallu and Kurekoppa in the Ballari-Hospet iron ore belt. This is the same region where the integrated steel manufacturer’s 10,000-acre Vijayanagar steel works are located.
Senior Congress leader H.K. Patil, who has opposed the deal, says the land might be worth Rs 1.5 crore to Rs 2 crore per acre, while the BJP’s C.T. Ravi has pegged the price at Rs 15-20 lakh per acre.
JSW, in a statement, said the land was given to the company on a lease-cum-sale basis. The lease terms had been fulfilled, it said, upon which the land has to be sold to the company. It also said it is planning to raise the production capacity of the Vijayanagar steel works, India’s biggest steel plant, from 12 million tonnes per annum (mtpa) to 18 mtpa. JSW recently invested Rs 600 crore in setting up a 100,000 kilolitre per annum paints plant in Vijayanagar.
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Govt’s justification
The H.D. Kumaraswamy government has justified the allotment by pointing to a memorandum of understanding signed in 2006-07, when a JD(S)-BJP coalition government was in power. Under the terms of that MoU, the lease-cum-sale of the land was to be converted into an absolute sale deed after 10 years.
At a cabinet briefing, rural development minister Krishna Byre Gowda said JSW Steel was given 3,666 acres in 2006-07 on a lease-cum-sale basis to set up a plant and infrastructure for employees. He said as per the agreement, the lease had to be converted to sale after 10 years, which the cabinet approved Monday. JSW Steel has so far deposited Rs 18 crore, and Byre Gowda said the company would have to deposit the difference in the amount.
But the JD(S)-Congress government, whose stability has come into question since the alliance performed poorly in the Lok Sabha elections, has been accused of being hasty, especially since the previous government headed by Siddaramaiah had deferred a decision on the matter for over three years because of a lack of unanimity in the cabinet.
The Kumaraswamy cabinet took the decision amid objections from within the coalition, as senior Congress leader Patil urged the chief minister in a letter to rescind the decision.
Patil’s objections and allegations
According to Patil, the value of the land is “many, many times more than at which it has been decided to be sold to Jindal”. He told ThePrint: “Portions of the land may also have mining potential, which can push the price to Rs 1.5 crore to Rs 2 crore per acre. All of it is not plain agricultural land.”
JSW, he said, already owes Mysore Minerals Limited, a government of Karnataka undertaking, over Rs 1,200 crore from the time when the two companies were in a joint venture.
Patil had headed a cabinet sub-committee which was tasked with determining measures to be taken by the government in the wake of the Lokayukta investigation into the mining scam that led to former CM Yeddyurappa going to jail. The sub-committee had advised the government to be mindful of the long-term consequences for the state exchequer while giving away land on sale to mining companies.
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BJP cashes in
The BJP, itself linked to mining scams in Karnataka, has been quick to cash in on the opposition to the cabinet decision from within the Congress.
“I suspect corruption in crores,” said Karnataka BJP general secretary C.T. Ravi, who has pegged the land prices between Rs 15-20 lakh per acre.
Having sown the wind with the media, CM HDK should not mind the whirlwind.