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India Inc has hailed the land acquisition ordinance, expecting many projects stuck on the issue to get expedited.
Realty players, power outfits and diversified infrastructure companies see the move as “positive” even as some feel the real test lies ahead — in its implementation. Doing away with the consent clause will speed up implementation of projects, said Isaac A George, Group Chief Financial Officer of GVK Power and Infrastructure Ltd. However, the issue that is getting increasingly worrisome is that the cost of land is shooting up, he added.
Financial services major Goldman Sachs said in a research note that the biggest gainer in the power sector will be Power Grid Corporation, which will now find it easier to get ‘Right of Way’ for setting up transmission lines. In its 2013-14 annual report, PowerGrid had highlighted that ‘Right of Way’ was a key hurdle to its projects. The company has 15 major transmission lines pending due to land acquisition issues.
Affordable housing Jaitirth Rao, Chairman, Value and Budget Housing Corporation, said the ordinance is a ‘good first step’ but unless the provisions are enacted as a law, the uncertainty will remain. The ordinance corrects the extreme swing in the land acquisition policy by the UPA-II government and gives infrastructure and construction sectors reasons for optimism.
Brotin Banerjee, Managing Director & Chief Executive Officer, Tata Housing Development Company, said the ordinance is a welcome step for the affordable housing segment, as land availability will become simpler and faster. As result of the ordinance, there will be no procedural change for national highway projects, land for which was acquired under the NH Land Acquisition Act earlier. “The procedure will continue as it is. But the compensation for landowners is expected to go up,” said official sources. “Similarly, there won’t be any incremental benefit for existing ports, as port trusts already have land. But land acquisition for new ports is likely to get easier,” said Shipping Ministry sources.
CREDAI view Prakash Challa, CMD, SSPDL and Chairman, Taxation Committee of Credai National, said though the ordinance sends out a clear message on the government’s decision to encourage business and investments, it has a short life and does not instil confidence in investors.
With inputs from Chennai, Hyderabad bureaus
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