Share-for-land model catching on in the east

Sajjan Jindal's model of making land-losers stakeholders in his Bengal project appears to be attracting others.

The Videocon group is considering a variation of the Jindal compensation package for its West Bengal projects and South Korean steel major Posco is examining this as an option for its land acquisition programme in Orissa.

Jindal's package for West Bengal, which appears to have found favour with local people, has three components: employment for at least one person per family losing land, compensation for land price in the form of cash and insurance annuity and free shares at par equivalent to land price.

Videocon Group Chairman Venugopal Dhoot also plans to allot shares to landholders who sell land for Videocon Realty and Infrastructure's three special economic zones (SEZs) in and around Kolkata.

However, he does not intend to allot shares for free and will make them a part of the total compensation package. In other words, land-owners will have the option to take cash or shares or both.

However, Dhoot said he does not want to copy the share allotment model being followed elsewhere because people's needs differ in different parts of the country and even within a state.

For example, share allotments will not be a part of the compensation package in Siliguri, a northern town in West Bengal where Videocon is setting up an SEZ, because land-owners there do not want shares.

Meanwhile, Posco is considering share allotment to landholders as an option for its Rs 52,000 crore project in Orissa. The company, which requires nearly 4,000 acres of land for a 12-million-tonne plant, says it will take a call on the issue by the end of this month.

"No doubt this is an option but we will decide after we know what people want," a Posco spokesperson said. To understand land-holders' demands, the company has asked Xavier Institute of Management, Bhubaneshwar, to carry out a socio-economic survey.

Of the 4,004 acres of land Posco requires, 3,566 acres is government land and 438 acres under private ownership.

The private land covers three gram panchayats of Gada Kujanga, Muagaon and Dhinkia. Dhinkia's is the largest tract covering 200 acres. The area has a significant peasant population with communist affiliation.

The spokesperson added that any share issue would have to be over and above the compensation. "Otherwise, people will not like it," he said.

Both Posco and Videocon will also offer one job per displaced family.

The Orissa rehabilitation and resettlement (R&R) policy has a provision for convertible preference shares to be issued to displaced people. The value of the shares could be up to 50 per cent of the one-time cash assistance.

The Jharkhand government, which is yet to notify its R&R policy, is also considering equity as a part of the compensation package.

Meanwhile, Sajjan Jindal says he will also offer free shares to land-owners in Jharkhand where he has proposed a 10-million-tonne steel plant.

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LAND AS CAPITAL

Jindal's package for West Bengal has three components: employment for at least one person, compensation in the form of cash and insurance annuity and free shares.

Videocon Group Chairman Venugopal Dhoot also plans to allot shares to landholders who sell land for Videocon Realty and Infrastructure's three special economic zones (SEZs) in and around Kolkata.

However, Dhoot will not allot shares for free and will make them a part of the total compensation package.

Posco is considering share allotment to landholders as an option for its Rs 52,000 crore project in Orissa. The company will take a call on the issue by the end of this month.

Posco has asked Xavier Institute of Management, Bhubaneshwar, to carry out a socio-economic survey.

Any share issue would be over and above the compensation Posco offers.