Oil town blues: How greed, polls and politics keep a village on the edge

Sonia Gandhi's 2013 announcement for a multi-billion dollar refinery caused a money stampede, but Modi's 2018 promise has made villagers of Pachpadra suspicious

A year ago they say there was nothing but salt marshes amidst rugged terrain and a boundary wall. Now the salt pans are gone and the arid landscape as far as the eye can see has been pummelled and flattened. Heavy-duty Caterpillar machines are at work laying roads, spools of electrical cables lie basking in the hot sun alongside camel dung, trucks ferrying sand intermittently leave trails of dust in which a handful of workers are busy building a warehouse.

At the site of the proposed Rs 431-billion Pachpadra refinery in Rajasthan’s Barmer district, Hindustan Petroleum Corporation (HPCL) has set up a base camp – few air conditioned cabins equipped with LED TVs and video conferencing facilities. A board at the site announcing wages signals the advent of an employment boom – Rs 373 a day for unskilled labour, Rs 437 for semi-skilled labour, Rs 527 for skilled & clerical labour, and Rs 617 a day for highly skilled labour. All labour rules too have been pasted on walls of the desert cabins in Hindi and English – the Contract Labour Act, Building & Construction Workers Act, and Child Labour Act. An engineer at the site says that the work hasn’t even started yet and all that can be seen is just “pre-project activity.”

By the looks of it, the sprouting of a 9 million metric tonne per annum oil refinery, which till 2018 existed only on paper, should signal the advent of a gold rush in Pachpadra and the surrounding town of Baltotra like it did with Barmer with the advent of Cairn’s oil discovery at fields now named Mangala, Bhagyam, and Aishwarya. Instead, there is anger and scepticism that runs large in the village. 

“In 2013, when Sonia Gandhi made the announcement, this village was awash with big cars. Villagers minted money by selling land. Recovery agents and banks have now taken back those cars. All the money that the people earned by selling land went down the drain,” says Bhanwar Singh, a man in his early 50s who works at a local diary in Pachpadra. Property dealers came from all over India to buy land from the villagers, made a handsome down payment, and promised to pay the rest of the money in instalments. 

But then the Congress government was voted out of power. Nothing was heard about the refinery ever again. Land prices collapsed. Those who had bought the land couldn’t sell it further. They couldn’t pay the villagers to whom they had promised to pay. The villagers had taken loans to buy cars or build houses in the hope of handsome future payments. When the buyers couldn’t pay what could the villagers do? They lost everything, continues Singh with a wide grin on his face.

“A new hotel was also opened just outside the village entry. Some people spent the money on building bigger houses. Now all that is left are some grocery stores, tea stalls, and photocopy shops which had opened in anticipation of good business,” says Raju Das, a Gujarati priest at the Jain temple in the village.

So why are people sceptical when signs of palpable progress are visible at the refinery nearby? In September 2013, a couple of months before the state election in Rajasthan, then Congress president Sonia Gandhi laid the foundation stone for the refinery. Mitesh Chauhan, a resident of Pachpadra and a real estate agent, says all hell broke loose after Sonia’s announcement. Before the announcement in September 2013, Chauhan says the land was worth nothing in and around Pachpadra. It sold from anywhere near Rs 10,000 a bigha (almost 0.4 acres in Rajasthan) to Rs 20,000 a bigha if the land was proximate to the highway. Soon after Sonia laid the foundation stone, the rates ballooned as property dealers and agents swarmed from across India to snap up land around the refinery. Within a few months, the land which was being sold for nothing now was valued at half a million rupees a bigha.

Barmer refinery site | Photo: Sai Manish

Month after month, the value just kept rising touching almost Rs 2 million a bigha even for so-called ‘disadvantageous land’. Land situated close to National Highway 25 was selling for as much as Rs 50 million a bigha. “My mama’s (maternal uncle) son got an offer before the 2013 announcement for around Rs 200,000 a bigha for a good piece of land he owned. He was lucky he didn’t sell. He sold it the next year and made Rs 8 million a bigha,” said Chauhan.

But this phenomenon wasn’t repeated with Modi’s announcement in 2018 because most villagers had not just a lost a lot of money but also trust in the political decision-making process. Buyers started coming and villagers started hedging their bets. 

“It’s true that there are very few buyers now as compared to 2013 and prices have collapsed. But I know the people here. Buyers and sellers of land are just hedging their bets wisely this time. Now some villagers are demanding Rs 10 million a bigha and finding no buyers. Buyers are willing to pay up to Rs 2 million for that land. Buyers are waiting for the project to show some real progress on the ground. I own some land near the refinery. I know exactly the kind of petrochemical industries that will come up there. So I am keeping an eye out for plastic makers and the like who will give me a good price for my land,” said Chauhan, who had also served a stint as a survey engineer with a construction company involved in the refinery project before taking to real estate. Without saying much, Chauhan hints people aren’t greedy but just hedging their bets in the face of an uncertain political climate.

In many ways, the people of Pachpadra are hoping HPCL does to their lives what Cairn’s oil discovery did to the people of Barmer – the district headquarters roughly an hour’s drive from the village. In 2004, when Cairn made the oil discoveries, gross domestic product (GDP) of Barmer was just about Rs 32 billion. 

In 2016-17, Rajasthan government estimates peg its GDP at Rs 414 billion – a GDP growth rate three times faster than the entire state of Rajasthan during this period.  In 2004-05, every person in Barmer earned almost Rs 13,500 on an average – lower than the state per capita income. 

In 2016-17, an average individual in Barmer earned 10 times more – higher than the state per capita income. But the politics driven speculative gain hasn’t worked the same magic either for Pachpadra or for Balotra – a bigger town just a few minutes down and across the highway from the village.

Paras Mal, a local whose salt pan was taken over for the refinery project, says most of the construction jobs at the refinery have gone to outsiders instead of local villagers. He continues, “Modi’s announcement of opening the refinery is also a political stunt just before the elections. People don’t know what will happen. From what I know, even the money hasn’t yet been sanctioned for the refinery project. What real progress will the refinery bring to our lives?”

In the time of elections, the people of a budding boom town seem to be hedging their bets as much on electoral outcomes as they are on the refinery’s progress just down and off the highway.