With things not working out according to plan in Mehsana district, the Gujarat Government is likely to offer 207 hectares (511 acres) at Hansalpur to Maruti Suzuki India Ltd for setting up its proposed Rs 18,000-crore plant.

Maruti, scouting for nearly 1,000 acres of land (including 500 acres for its vendors) in Gujarat since 2011, had reportedly favoured an area near the famous Bahucharaji temple in Mehsana district. This triggered a manifold increase in land prices there within weeks. However, the initial enthusiasm ebbed subsequently, owing to the economic slowdown and complexities involving in procurement of land, both private and Government-owned.

According to market sources, this may have prompted both the State Government and Maruti Suzuki to look for alternatives, especially as Maruti was keen to be closer to Sanand where the Tatas, Peugeot and Ford have been allotted land.

Land allocation

Reports suggest that the State Government is likely to allot 207 hectares near Hansalpur, in Ahmedabad district, at Rs 643 per sq.m. The Finance Department's Valuation Committee has made this recommendation to the State Government. The Gujarat Industrial Development Corporation (GIDC), the State-level industry regulator, and the State Government currently own this land.

Business Line could not contact the Finance Secretary, Mr M.M. Shrivastava, whose office said he was busy in a series of meetings, and the Industry Secretary, Mr Maheshwar Sahu, who is on leave until June 4, for confirmation.

Since 2010, Maruti has been scouting for alternative sites for its expansion plans, particularly as a result of labour unrest and stiff competition. In Gujarat, it already has a pre-export inspection facility at Mundra Port with a capacity of two lakh four-wheelers.

Fifth carmaker in State

The company's board had, in October last year, approved the purchase of land in Gujarat to set up MSIL's third manufacturing facility, after Gurgaon and Manesar in Haryana. “This purchase would be subject to final negotiations on price and all legal formalities being completed,” the company had said.

Maruti Suzuki will be the fifth major carmaker to set up a plant in Gujarat, the others being General Motors, which came to Halol, near Vadodara, in the 1990s, Tata Motors, Ford and Peugeot, which set up shop at Sanand. The Tatas invested Rs 2,200 crore to set up their plant on 1,100 acres, whereas Ford India and Peugeot got 480 acres and 584 acres, respectively, and both plan to invest around Rs 4,000 crore each.

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