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Tata Steel’s TN project stuck on land issue

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The Tatas have shut down their offices in Tirunelveli and Sattankulam earlier this year and stopped any attempt to buy land, say company officials.

R. Balaji

Chennai, April 19

The Rs 2,500-crore Tata Steel titanium dioxide project has been stalled with the Tatas giving up trying to buy land for the project in Tamil Nadu.

According to company officials, the Tatas have shut down their offices in Tirunelveli and Sattankulam earlier this year and stopped all attempts to buy land. In the last one year, against an estimated 9,829 acres needed for the project the company has been able to get 25 acres.

Unless the Government intervenes in land purchase, it would be an impossible task, feels Tata Steel. The company hopes to make a representation to the Government later this month to support it in buying land.

The company spokesperson said the constraints are the legal hassles involved and the arbitrary hike in land prices by middlemen.

The main hassle in land purchase is the lack of clarity in legal documents, absence of parent documents and the ‘tough job’ of tracing the absentee landlords. The company had earlier said that it would have to talk to over 4,100 land owners to aggregate the required land area. The paper work could just not be cleared, they said.

The company has also sought the Government’s support in fixing land prices.

The company is willing to pay the market value as fixed by the Government. Land purchase transactions 3-6 months back have ranged around Rs 40,000 an acre. But the prices quoted – often by middlemen claiming to represent original owners – are thrice or four times as much. It would affect the viability of the project, the official said.

After nearly a decade since the project was conceived, the Tamil Nadu Government entered into an agreement with the Tata Group with its Chairman, Mr Ratan Tata, signing an agreement in the presence of the Chief Minister, Mr M. Karunanidhi, in June 2007. This was the third such attempt with the State Government entering into agreements in 2002 and 2005 to launch the project with the Tatas.

The titanium dioxide project, involving mining of 5 lakh tonnes of the ore ilemnite, was touted as one of the two major projects that would drive the economy of the State’s southern districts. Tata Steel had planned to start production by mid-2008.

The other project hoped to catalyse the economy of the southern districts is the Nanguneri multiproduct SEZ, which too had been under planning for over a decade. It was launched a couple of weeks back with the Hyderabad-based AMR group signing a joint venture agreement with the Tamil Nadu Industrial Development Corporation.

Related Stories:
TN wants public approval before clearing Tata project
Tata Steel revives titanium dioxide plant in TN

(This article was published in the Business Line print edition dated April 20, 2008)
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