Karnataka's move to transfer land to Suzlon Infrastructure

C. Shivkumar

The reasons

Land was

originally allocated to NTPC for which it had made part payment.

Had spent

Rs 38 cr for developing the site despite power plant proposals on the back burner.

Bangalore, Oct. 10

The public sector NTPC Ltd has expressed reservations over the Karnataka Government's proposal to transfer land near Mangalore to the multinational Suzlon Infrastructure Ltd (SIL) for setting up a Special Economic Zone (SEZ).

NTPC has demanded a compensation of close to Rs 60 crore for the transfer, since it was originally allocated to it for which it had made part payment for the site at Padubidri near Mangalore. A copy of this communication was made available to

Business Line

. For the SEZ, Suzlon had sought a land allocation of 500 acres.

SIL is an associate company of the transnational Suzlon Wind Energy Corporation. A spokesman for Suzlon, when contacted, said the company had made the application to the State Government for setting up an SEZ exclusively for high technology engineering industries. It also proposed to set up a manufacturing facility within this SEZ, through another associate company, Suzlon Energy Ltd, for making turbines.

The Suzlon spokesman declined to comment on NTPC's compensation demand. Instead, he said the company was awaiting allocation of the land for the SEZ. The company's investment for the SEZ is estimated at Rs 250 crore. Suzlon's proposal for the SEZ was cleared by the Karnataka Government more than a month ago.

NTPC's compensation demand, the communication said, was made on the basis of the tripartite agreement entered between the PSU, the Ministry of Power and the Karnataka Government in 1996. Under that agreement, the State Government was expected to compensate NTPC Rs 21 crore in the event of sale of land and development expenditure. The PSU was allotted 97.25 acres of land in the region of the 398 acres planned for setting up the power plant.

Although the power plant planned by NTPC is now on the back burner, the company had gone ahead with development of the land. For this purpose, the PSU had spent another Rs 38 crore for developing the site. Accordingly the compensation to NTPC would have to be paid by the State Government, or Suzlon would have to be allotted another location for setting up the SEZ.

In the vicinity of the SEZ, the private sector Nagarjuna group is now setting up a power project. Besides, another public sector ONGC had also proposed setting up an integrated petrochemical complex in the region.

(This article was published in the Business Line print edition dated October 11, 2006)
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