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Japanese pull out of Haryana township project

Seven years of dillydallying, official apathy and redtapism by the Centre and Haryana government has finally taken the toll of the prestigious Rs 20 billion Industrial Model Township to be set up jointly by the Japanese and Haryana State Industrial Development Corporation.

The curtain was rung down on the controversial project with the recent announcement of Haryana Chief Secretary and HSIDC Chairman R S Verma that the state government would go ahead with the township on its own. The Haryana government has now allocated Rs 2 billion in fiscal 1997-98 to build the IMT, which is likely to cover 1,700 acres.

The IMT's fate was sealed following the fierce row between the Haryana government and the consortium of Japanese corporations over the amount of compensation to be paid to farmers for the land to be acquired at Manesar in Gurgaon district, the proposed site of the township.

Finance Minister P Chidambaram promised to allot land for the IMT at $ 12 per square metre. The affected farmers vehemently opposed the announcement on the ground that their land was worth much more that price. The farmers then floated the Bhoomi Bachao Manch and launched an agitation against the Haryana government's plan to acquire their land.

This alarmed the Japanese who demanded a counter-guarantee from the Indian government against any subsequent hike in the price. This guarantee, however, was not forthcoming. Then the Japanese placed a condition that after taking possession of the land, any revised compensation fixed by the court would have to be borne by the Haryana government. The wary Japanese also expressed their reservations about developing the IMT in one go and preferred doing it in phases.

As a result, the Overseas Economic Cooperation Fund of Japan which had committed Rs 13 billion for the township, declined to release the money. The Japanese MNCs involved -- Mitsubishi, Marubeni, and Mitsui -- also dragged their feet stating that with the high cost of land, the entire project had become uneconomical.

The MoU for the project was signed in April 1995 after a notification to acquire land for the IMT on the Delhi-Jaipur highway was issued.

The impasse began when the erstwhile Bhajan Lal government clandestinely selected a new site, located opposite to the original site on the Jaipur-Delhi highway. The Japanese opposed the move and threatened to scrap the project unless the HSIDC reverted to the original site.

As a result of this, the Haryana government was forced to issue another notification for the acquisition of about 1,700 acres of land on the original site. But it was too late. Land prices of the original site skyrocketed from the initial Rs 1 million to Rs 1.5 million per acre to Rs 3 million to Rs 4 million per acre. The Japanese refused to pay such a high price and were prepared to pay only Rs 1.5 million per acre.

Many farmers also insisted that they would not part with their fertile land at any price as it was their only source of livelihood. Manesar sarpanch (village chief) Sampat Singh said, "Earlier our land was acquired for the National Security Guards complex, followed by the BSF, CRPF, and IDPL. And now they want a large tract of land for the Japanese township. We have no land to spare. We will do our best to defend our land."

The Bhoomi Bachao Manch has the support of former chief minister Om Parkash Chautala who has opposed the project on the ground that the government was acquiring productive agricultural land whereas barren land was available about five kilometres from this site.

The farmers of Manesar also oppose the township for security reasons. Says Manch Vice-Chairman Mehar Chand, "It's a highly sensitive area because of the NSG and ammunition depots in the vicinity. We have petitioned Defence Minister Mulayam Singh Yadav to stop this project in the interest of national security."

The chances of setting up the IMT brightened following the installation of the Bansi Lal government, which announced its plans to expedite the project. However, negotiations between the HSIDC and Japanese consortium failed to resolve the dispute.

The Haryana government also threatened to disassociate Japanese MNCs from the project, but the Japanese refused to budge. The Haryana government's desperation emanated from the fact that the notification for the land acquisition was nearing its expiry which would force the state government to initiate the land acquisition process all over again.

The final go-ahead for IMT came in 1990, six years after the project was conceived. A joint committee was set up in January 1991, chaired by Kalyan Banerjee of the Export-Import Bank of India, and comprising representatives from the ministries of industry and urban development, Industrial Development Bank of India, and the Confederation of Indian Industries. The Japanese members represented Mitsubishi, Mitsui, Bank of Tokyo, and the Industrial Bank of Japan.

In 1992, the Japanese International Cooperation Agency selected Gurgaon as the site for the IMT in preference to Noida and Bangalore. Four factors tilted the scale in favour of Gurgaon -- proximity to the Indira Gandhi International Airport in New Delhi, uninterrupted power supply promised by the state government, land on attractive terms, and a commitment to ensure complete privacy for residents of the township.

The Overseas Economic Cooperation Fund of Japan then committed financial support worth Rs 13 billion, which will not be forthcoming now.

The derailment of the township project will also cast its shadow over the Mass Rapid Transport System Project in Delhi for which the Fund has committed financial aid. The transport project is also mired in red tape.