Industry_West Bengal_ProjectsMonitor

Mamata Banerjee_West Bengal_ProjectsMonitorWest Bengal Chief Minister Mamata Banerjee’s recent bonhomie with the top leaders of India Inc has surprised many. This sudden change of heart by Mamata, who till recently was known more for her efforts in driving Tata’s Nano project out of West Bengal is surely not without any reasons. One need not go too far to find out the reasons. State’s rising unemployment and dwindling resources have left the mercurial Chief Minister with limited options. For example, state’s tax to GDP ratio is just below 5%. Out of total revenue of Rs. 32,000, the state spends nearly Rs. 25,000 crore on servicing its Rs. 2 lakh crore debt, thus leaving little for development works. Further, West Bengal with 4.95 million people without jobs leads the list of educated unemployed in the country and even more disturbing is the fact that this number is growing over the years. With this kind of statistics the state can ill afford to ignore the services and manufacturing sectors in the state to increase revenue and provide employment opportunities.

Projects abandoned in West Bengal under TMC regime
Cost in `crore
When abandoned
Videocon Industries
Asansol Steel Project
June 2012
Deferred due to land acquisition issues
JSW Bengal Steel
Salboni Integrated Steel Project
April 2013
Unable to tie up iron ore supply
Bhushan Steel
Asansol Steel Project
December 2011
Deferred due to land acquisition issues
Kolkata Port Trust
Sagar Islands Dock Project
March 2012
Abandoned due to non availability of funds
Bengal Unitech Universal
International Convention Centre
March 2013
Project was dropped for unspecified reasons
Bhushan Steel
Cold Rolled & Galvanizing Plant
April 2013
Abandoned due to land acquisition issues
Bengal Danpuri Truck Terminal
Amdanga Truck Terminal Project
March 2013
The project kept on hold due to some political issues
Vikash Smelters
Ethora Ferro Alloys Project
June 2012
Abandoned due poor financial condition of the promoter
Bengal Danpuri Truck Terminal
Santragachi Railway Terminal Project
March 2013
The project kept on hold due to some political issues
Suman Agretech
Haldia Vegetable Oils Project
May 2012
The project kept on hold due to delay in getting clearances
Graphite India
Durgapur Captive Power Project
April 2012
Project kept on hold for unspecified reasons

However, with Singur and Nandigram incidents still lingering in the minds of investors, Didi’s task of attracting investors to state is easier said than done. Also, some of the recent incidents don’t present the West Bengal state government in an investor friendly perspective. Take for example, last year’s incident involving ABG group. In November 2012 ABG Haldia Bulk Terminals pulled out of Haldia thus once again bringing back the horrifying memories of 2008 Singur incident which eventually drove Tatas Nano project out of West Bengal. ABG had feared safety of its employees when three of its senior employees were reportedly abducted by the ruling TMC’s party members and hesitation on the part of the local police to act upon the complaint by the company forced the latter to take this fatal decision. It was not just the question of job of 350 workers who had lost their livelihood due to this pullout but also the wrong signals it had sent to the potential investors. With this perhaps state’s dream of becoming an industrial hub of eastern part of the country under Mamata Banerjee’s regime came to an abrupt end, at least in the short run.

NH  projects delayed due to land acquisition problems
Number of projects
Arunachal Pradesh
Tamila Nadu
West Bengal

Also investors are not too comfortable with the growing trade unionism in the state which has resulted in many strikes and lockouts. Number of man days lost due to industrial disputes and strikes in West Bengal during 2012 is 365,959 days which is ten times more than what is recorded in Gujarat!

Further, recent spate of project developers abandoning their project in the state have not helped the cause of the state which aspires to become industry friendly state. Most of the big ticket projects (mostly in steel sector) were abandoned due to problems relating to land acquisition issues. Land acquisition in West Bengal has become a contentious issue for many project developers. According to an estimation done two years ago a number of steel projects in West Bengal entailing an investment of around Rs. 1,09,550 crore required 23,950 acre for development. With limited land bank with the state government prospective investors are forced to approach the private land owners directly who in turn demand a price which at times is unreasonable. Take the case of Shyam Steel which is setting up a steel project in Asansol. The project is stuck due to part of the land required for railway siding is not available. The owner of the land is asking for life-time contract for loading and unloading of raw materials from the company in return for surrendering his land for the project. It is not just steel projects which are facing the brunt of land owners, there many National Highway projects too are stuck up due to land acquisition problems.

West Bengal projects which are limping
Cost in `crore
Expected completion date
Jai Balaji Industries Purulia Integrated Steel Project
December 2017
Project has not made any headway since 2011
Vedanta Aluminium Bidhanbag Aluminium Smelter Project
December 2015
Project is stuck up due to objection raised by Coal India regarding plant site on coal bearing region
Rail Vikas Nigam Ltd Kolkata Metro Rail Expansion Project
March 2016
Work is in progress
Universal Success Enterprises Haldia Power Project
Work on the project yet to commence though MoU with the government was signed in 2009
NTPC Katwa Coal Based Power Project
Project which was mooted in 2007 due to coal and land related problems
Damodar Valley Corporation Raghunathpur Thermal Power Project
June 2017
Work on the project is underway
Universal Crescent Power Sagar Super Thermal Power Project
According to last available information tender evaluation was in progress
Bhaskar Silicon Ltd Haldia Polysilicon Project
The company has not yet been able to achieve financial closure

But few road shows and name calling with no major change in the ground realities may not help the state in attracting the investors. Didi has to take some concrete steps to win back the investors confidence and make West Bengal investment hub of Eastern India. She may have to take few lessons from her counterparts in Southern and Western India in this regard.

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