Project stuck on land acquisition hurdles

A late yet, exemplary move to remove hurdles before acquiring land for the Gevra project in Chhattisgarh seems to have helped Coal India avert the biggest downside risk to its production plan, in this fiscal.

At 35 million tonne of annual production, Gevra is not merely an opencast mine but the single largest source of power grade coal in the country, if not Asia.

A showpiece project of the Bilaspur-headquartered wholly owned subsidiary, South Eastern Coalfields Ltd (SECL); the project contributed a little over eight per cent of CIL’s annual production of 435 mt and approximately 15 per cent of the company’s pre-tax profit of Rs 8,606 crore, in 2011-12.

No land

On the flip side, in 2011-12, Gevra had scooped out the last grain of coal from the 3,000 hectares of land that was made available to the mine in the mid 1980s.

The mine’s intended shift to the South – along the 8-km wide coal seam – was restricted by seven villages, resisting the planned acquisition of nearly 1,100 hectares that would keep the mine running at the current pace for nearly 23 years.

While production was so far maintained by extracting coal from a small patch in the East, the available resources were not enough to survive the full year.

The bottomline was clear. Unless the company made a breakthrough in acquisition; the promised 7.5 per cent production growth in 2012-13 would be hit.

Fragmented ownership

According to company sources, the root cause of the problem lies with an early notification for acquisition in the 1980s.

While CIL delayed acquisition, the prospect of job (at CIL) made the land valuable, leading to a highly fragmented ownership.

A 12-acre plot at Pondi village, for example, is now held by 147 persons. Similarly a 3.6-acre piece of land in the same village is fragmented into 42 pieces.

Lucrative compensation

Waking up to the reality late in 2011, the SECL management convinced the CIL leadership to improve the company’s RnR policy to win over the opposition against land acquisition.

According to the new policy, adopted in March, SECL offered Rs 6-10 lakh an acre for land depending on quality, coupled with job offer or compensation (Rs 5 lakh an acre) for loss of livelihood. Farmers can also opt for annuity income against loss of livelihood. Flexibility is also adopted in offering jobs to locals.

Breakthrough achieved

Armed with an improved offer, the SECL top brass literally camped at the villages to ensure speedy acquisition. The perseverance finally paid off as landowners from two villages – Amgaon and Pondi – finally started accepting compensation beginning this month.

“It was a critical situation. Thankfully we could start acquiring land in time. Production will soon resume in the resourceful southern front,” says SECL Chairman A.K. Sinha.

(This article was published on July 29, 2012)
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