Adani Group may buy 1k acres of RINL land for port expansion
VSP’s lands were acquired for public purposes, so selling them to a private company would be illegal and a breach of public trust, says former IAS officer EAS Sarma
image for illustrative purpose
Visakhapatnam Despite stout denial, a prominent social activist and former IAS officer on Tuesday said the Adani Group is in talks with the management of Rashtriya Ispat Nigam Limited (RINL), the corporate entity of Visakhapatnam Steel Plant, for buying its surplus lands for increasing stacking area of Gangavaram Port, which it had acquired recently from the DVS Raju-led consortium, its foreign partners and the Andhra Pradesh Government.
The claim has come amid protests by the employees of VSP over alleged denial of discharge of raw material by the Adani Group from Gangavaram Port for delayed payment of cargo handling charges due to working capital crunch. Interestingly, while criticising the attempt by the employees led by Left-affiliated unions to barge into the premises of the port sometime ago, the Adani Group had categorically stated that it had no interest in the privatisation of RINL. The Department of Investment and Public Asset Management (DIPAM) under the Ministry of Finance is overseeing the preparations for selling off RINL, its subsidiaries and joint ventures by way of 100 per cent privatisation.
Former IAS officer EAS Sarma said in a statement that VSP is being forced to raise financial resources in the face of a deliberate attempt by the Government of India to weaken it in all respects. He alleged that it is in negotiation with the Adani Group to lease out 1000 acres for the latter's stockyard requirement at their recently acquired Gangavaram Port.
Gangavaram Port, which was built in the land belonging to RINL, originally conceived as its captive jetty as per its DPR, was alienated later during the TDP regime to facilitate construction of a minor port under PPP mode. After the YSRCP assumed office, the State Government's stake in the port was also sold off to Adani Ports and Special Economic Zone (APSEZ) to enable 100 per cent stake acquisition by the Adani Group. The port is located on the backyard of VSP and it has been speculated for quite a time that the Adani Group is eyeing to get hold of surplus lands of RINL as part of its land monetisation efforts so as to meet its future requirement needs.
RINL, with a ca pacity of 7.3 million tonnes per annum after it increased its capacity from three million tonnes in two phases with a total investment of Rs 16,300 crore, has a land bank of 22,000 acres. It is a known fact that the management of RINL has been making several efforts to sell away its surplus lands to meet its working capital requirement. The company is also in the process of finalising the proposals for strategic partners to either fund it or supply iron ore and other raw material required for the plant in exchange of finished products rolled out from VSP.
Reports are being circulated that Adani Group, which is on expansion-spree, is keen on foraying into the steel sector and may take part in bidding for buying RINL, apparently to give legacy players like JSW and Tata Steel a run for their money.
Sarma, in a complaint to Nagendra Nath Sinha, Union Steel Secretary, cautioned the Ministry of Steel not to allow such a highly regressive proposal to sell the precious lands of RINL as part of land monetisation drive.
He stated that the said lands presently under VSP's occupation were originally acquired under Section 3(f)(iv) of the erstwhile land acquisition legislation which enabled the State government to resort to forcible acquisition of fertile agricultural lands owned by farmers for a "public purpose", defined as "the provision of land for a corporation owned or controlled by the State". Alienation of such land to a private company would therefore not only be illegal but also would constitute a breach of the public trust.
The social activist said the lands in the possession of VSP are highly valuable. "At today's market price, the value of 1,000 acres would be far in excess of Rs 20,000 crore. VSP itself may require that land for its future needs and the proposed Adani deal will constrain its growth. In the past, VSP was forced to part with around 2,000 acres of its land, valued at that time at more than Rs 20,000 crore, to the earlier promoter of Gangavaram Port, another private group, from whom the Adani Group acquired the port through a non-transparent deal, especially the residual equity share of about 11 per cent of the State government without any competitive bidding." He pointed out "in other words, the Adani Group has already been the recipient of undue largesse from both the Central and the State Governments, which was against the public interest. The earlier land deal that benefitted the original promoters of Gangavaram Port, the later deal involving the sale of the State Government's equity sale to the Adani Group and the proposed additional land deal between VSP and the Adani Group raise questions of propriety calling for an independent judicial enquiry."
