Tuesday December 08, 2009

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By Sam Devraj  ( Assistant Editor )

Irking land deal: Anil Ambani faces court’s ire

AN INDIAN court has dealt a blow to plans by tycoon Anil Ambani for a multi-billion-dollar power plant in the energy-hungry country, ordering that the process for acquiring land be started afresh.

The Allahabad High Court in Uttar Pradesh state ruled the land acquisition did not have the consent of farmers whose plots were confiscated for the $5.4bn (£3.3bn)  plant.

The acquisition “cannot be termed acquisition for public purpose” as it was done for a private company, the court said in the ruling, which capped five years of protests by farmers.

The judgement, announced on Friday (December 4), came as a setback for Ambani's Reliance Power, which calls the 7,500-megawatt project the world’s largest gas-based power plant.

A Reliance Power spokesman said on Saturday (December 5) the company was reviewing the ruling and was “fully committed” to the plant.

Reliance Power raised $3bn (£1.83bn) last year through a share sale, promising to build a slew of power plants.

The 2,500 acres (1,1011 hectares) of land near Dadri, 30 miles east of New Delhi, was expropriated in 2004 for the plant by the Uttar Pradesh government.

The government invoked a legal provision for emergency powers to bypass local objections and obtain land, saying the project was for public benefit.

But the court ruled the government had no reason to issue emergency orders and would have to invite objections from farmers before building the plant.

Reliance Power insisted in an emailed statement it had all “clearances required” for the project.

“It is clear land acquisition for the Dadri project has not been set aside,” Reliance Power chief executive JP Chalasani said.

The government has merely “been directed by the court to follow certain procedures in the land acquisition process,” he said.

Industry body Confederation of Indian Industry (CII), while not commenting on the Ambani case, said it backed a bill to be presented to parliament to create government land banks to smooth the path for industrial projects.

“The state could acquire the land and industry could procure the land from the land bank rather than having to procure the land itself,” CII director-general Chandrajit Banerjee told reporters.

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