Hi Friends,

Even as I launch this today ( my 80th Birthday ), I realize that there is yet so much to say and do.

There is just no time to look back, no time to wonder,"Will anyone read these pages?"

With regards,
Hemen Parekh
27 June 2013

Friday, 26 February 2016

Putting Cart before the Horse ?

An article in Hindustan Times ( 24 Feb 2016 ) reports :

" ...the government has now asked Industrial Corridors to award infrastructure and manufacturing projects only after the bidding companies show they have acquired the land needed "

I presume that , at this stage , based on the bid amount ( and other qualifying criteria ) , one bidder has been selected from among those who submitted bids , for a specific project to be located on a given piece of land , close to the Industrial Corridor

But the order ( award ) will not be placed till such time he produces " proof " of having acquired the land , which could , well belong to a dozen farmers !

Obviously , no industrialist will buy a specific piece of land in advance , from a dozen farmers , not knowing whether his bid will succeed or not !

But now that he has won the bid , he must approach those 12 farmers for the purchase of the land and enter into serious negotiations

Since the farmers " know " that an industrialist will approach them , ONLY if he has won the bid , they are in a much better bargaining position !

They can bargain collectively and quote a very high price - may be a price far in excess of what the winning industrialist had budgeted for , in his bid !

The negotiations can take weeks or months to conclude an agreement or may even fail , forcing the industrialist to back out of his commitment

That may require selecting the next ( highest ? ) bidder and repeat the process all over !

The whole idea of awarding only AFTER acquisition of required land was to speed up the project implementation

But in this idea, I see a danger of endless going in circles !


 Consider following excerpt from my email to Shri Nitin Gadkariji , on 23 March  2015  :

[  I think there is a simple solution to the concerns expressed by the farmers . Please consider the following :

*     Each project will be tied to a specific SPV , created for that purpose only

*    In the first instance , affected farmers will create a " Cooperative Society " 

*   Co-operative Society will issue shares to each land-donor farmer , in proportion to the QUANTITY / VALUE of the land donated by him

*   In turn , Co-operative Society will receive shares in the SPV , equal to the value of the land + a cash compensation equal to 4 times the value of the land

*  Farmer's shares of Cooperative Society cannot be sold in open market before 5 years but can be gifted to wife / Children

*  Shares of Cooperative Society in the SPV itself cannot be sold for next 10 years

*  The " Cash-Value Compensation " received by the Co-operative Society ( ie 4 times the land value ),  will be deployed as follows :

   *  To be immediately paid in cash to the farmers............ 2 times

   *  To be deposited in the Jan-Dhan Account of each farmer as FIXED DEPOSIT ( with 10 @ interest )....2 times  ]

Since each State is in serious - and healthy - competition with other States to attract investments , those which offer an equitable and just solution to the farmers as well as to the industrialists , will succeed

And there will be no need to pass any Land Acquisition Bill in Rajya Sabha  !


hemenparekh.in / blogs

27  Feb  2016


Make    Yourself    Heard

Dear Visitor :

It is time for YOU to speak up - and demand that YOU are heard

By emailing this suggestion - incorporating your OWN improvements - to the following Policy Makers

(  Just multiple copy all the following Email IDs into the Recipient column of your Outlook and Copy / paste this suggestion in the Message Box ) :

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