'Land Acquisition key for dedicated freight corridors'

Sonia: The government is looking to seriously change some of the illogical provisions of the Land Acquisition law and the biggest one that most industry experts have indicated to us is in the case of PPP projects where it is mandatory to take the consent of 70 percent of the people who own this land. Do you think in this session of the parliament some of these provisions might be done away with especially this one?

A: Let us first look at briefly the context of the whole Land Acquisition Act as it was there earlier and what the new government is looking to do around industrial development. With a strong focus on infrastructure creation as a GDP driver obviously the importance to freight corridors, industrial corridors, creation of new ports, power plants are taking significant importance. In that context the whole Land Acquisition Act as it exists today becomes a very important piece in the mix in terms of achieving those objectives.

I think we have seen a significant pendulum shift so to speak between the 1894 Act and the 2014 Act. One was at one extreme, the other went to be absolute other extreme. And the critical pieces that need resolution are around time to acquisition, the level of consent needed, the whole framework of the R&R, policies that work there including the social impact assessment.

Having said that I don’t think we should ever get away from a situation where the framework is equitable, the framework is fair. It provides fair prices, compensation on an immediate and quick basis which again were issues with the earlier act. So without losing that, the government really needs to look at how it can make the process more structured, more fast and equitable. 

Latha: What we understand is that the social impact assessment as well as 70 percent of the consent coming in for PPP will be waived. That is about all, the government repeatedly said they won’t touch the price. If those two were removed will it make a seminal difference?

A: Definitely yes. For PPP projects primarily because if you look at the whole nature of PPP project largely the government remains the owner of the land and therefore concerns around ownership of land, what the land is put to use for. There are pretty strong shareholder governance again in PPP projects on what the land is put to use. Therefore removing or reducing the consent around PPP projects can significantly improve speed to market of PPP projects without removing concerns on what the land is put to use to.

Again social impact assessment, if the government is getting into a PPP project, looking at it as focused on infrastructure or industrial development there would have been application to the whole process of where the project should come upto, what is the impact of the area and again repeatedly going through studies which are very long drawn out which have 6-12 months defined in terms of time lines. Going back to zero base if it is not completed in that timeline will all affect the implementation of such PPP projects. So these are good levers to work with in terms of starting out with government and PPP projects and looking at what can be done there to improve the speed of acquisition without sacrificing on compensation.

Latha: Did you hear of any other amendments that the bill might bring in?

A: Not really. I think a lot of the focus has been around where SIA should be there for PPP. There has been some debate on whether the consent would be totally waived in the case of PPP or should it come down to 50 percent from the current 70 percent. These two seem to be the large focus areas.

The third is a little controversial which is around the whole definition of urgent requirement, emergency requirements of land and when the government can step in on the basis of urgency requirements.