Tuesday, July 8, 2008




After the tragic incidence of Nandigram on 14th of March, West Bengal State Government has decided not to set up Chemical Hub at Nandigram. Before that State Government was in the process of preparing materials to let people know what it intense to do in and around Haldia and adjoining district of South 24 Parganas. This note was prepared particularly for this purpose. It has explained briefly what kind of infrastructure has been contemplated in the state to make it happen. This note will help to know the salient features of the agreements signed by the West Bengal Industrial Development Corporation and New Kolkata International Development Private Limited on July, 2006. This note also elaborates the plan of the Central Government in regard to setting up of Chemical hub. It has also incorporated the recommendations of the standing committee on Commerce and Industries of the West Bengal Legislative Assembly in the month of November, 2006. This note will help to clear some of the misinformation as well as apprehensions about the projects and the approach of the state government in this regard including compensation and rehabilitation of those who may loose their land for this purpose.


The growth of the chemicals and petrochemicals industry in Haldia, based on the availability of port facilities, encouraged the State Government to plan for the development of a large chemical hub in the Haldia area. It was however not possible for the State Government to invest in the infrastructure required for this purpose. The decision of the Government of India from 2005 onwards to create Mega Chemical Industrial Estates and then Petroleum, Chemicals and Petrochemicals Investment Regions in the country, and selection of Haldia as a location for this purpose offered the opportunity for the State Government to fulfill its long standing plan for a chemical hub in Haldia.

In July 2006 the Government of West Bengal decided to set up a Petroleum, Petrochemicals and Chemicals Investment Region around the existing industrial cluster I Haldia. For this purpose, the State Government entered into an agreement with NKID, a private sector consortium. This agreement is in the form of a public-private partnership, with a number of separate components, details of which are shown in the Annexure. The implementation of the NKID project, which is a composite project, requires constant monitoring, and for this purpose the State Government has recently constituted a Steering Committee chaired by the Minister-in-Charge, Commerce and Industries. This is the first Status Report on this project, and this report will cover the policy issues and factors on the basis of which the decision of the State Government was taken, and will also deal with steps through which the State Government proposes to implement the project.

A brief outline of growth in Haldia

The development of Haldia as a port and an industrial zone began with the commissioning of an oil jetty in 1968, which was followed by the commissioning of the refinery of Indian Oil Corporation (IOC) in 1971. The port facilities in Haldia were significantly enhanced with the commissioning of the Haldia Dock Complex (HDC) in 1977. This acted as the trigger for industrial growth in the contiguous areas. The State Government adopted a policy objective to develop the area for petrochemicals and chemical industries. After continuous effort, overcoming many obstacles not related to techno-economic factors, the history of which is well known, the Government succeeded finally to establish Haldia Petrochemicals Limited, as a joint venture project, in the late 1990s. The next big investment in Haldia arrived when Mitsubishi Chemical Corporation (MCC) selected Haldia out of all possible locations in India as the site to set up their manufacturing facility. The confidence of MCC in Haldia and the Govt. of West Bengal was reinforced when in 2005 they decided to double their investment in this plant. On the way, other plants have also come up such as Hindustan Lever (now taken over by Tata Chemicals), Exide, South Asia Petrochem, Indianoil Petronas, Electro Steel, Ural India, Ruchi Soya and so on. The industrial growth in Haldia from the 1990s onwards matched the growth seen in the 1950s and 1960s in the Durgapur-Asansol belt.

The industrial growth in Haldia was accompanied by urbanization and population growth. This urban growth was reflected in the changes in the administrative set up. A police station was set up in Haldia in 1971, carved out of the area under Sutahata Police station. Haldia was declared a Notified Area Authority under the Bengal Municipal Act in 1983, which was converted into a Municipality in 1997. In 1989, Tamluk Sub-Division was divided and Haldia Sub-Division was created. Lastly, in 2000 Haldia Block was created out of the erstwhile Sutahata I Block.

Requirement of Infrastructure for a Chemical Hub

West Bengal has only about 220 kilometres of seacoast, a considerable extent of which falls in the Sundarbans and the Gangetic delta. As a result, West Bengal’s ports are riverine, on the Hooghly River. Even though it is on the river, HDC has a large volume of business, and together with the Netaji Subhas Docks in Kolkata; it is at present the second largest port in India in terms of volume of cargo handled. Its advantage is that it serves and is capable of serving a very large hinterland, comprising not only West Bengal, but also North-Eastern India, large parts of North India, Nepal and Bhutan. Its disadvantage vis-a-vis other major ports in India is that it is on the river and the available draft does not exceed 9.50 metres at any time of the year, and this draft has to be protected by a large volume of annual maintenance dredging.

A port is a major contributor to industrial growth, and historically it has been seen in different countries that industrial clusters and urban centres have come up around a port. The port provides the necessary infrastructure for the movement of goods, internationally from one country to another, and domestically from coast to coast within a country.

Development of the petroleum and petrochemicals sector internationally has been linked to a port facility. Crude oil for the refinery sector and various raw materials for the chemicals industry have to be imported, since these are not locally available in sufficient quantities. If the refineries do not produce sufficient quantity of naphtha to feed the petrochemicals sector, then naphtha also has to be imported. For example, a substantial percentage of the requirement of naphtha of Haldia Petrochemicals and the entire requirement of paraxylene by Mitsubishi Chemicals is met through imports. Similarly, a major part of the production of the chemical and petrochemical units will have to be exported. The existence of the port in Haldia is the reason for the establishment of refinery and petrochemicals industry there.

Keeping in view this important contribution a port makes to the process of industrialization, and the constraint caused by the comparatively low draft in Haldia, the State Government considered it essential to have a deepwater port in West Bengal. This deepwater port could be located on the coast of West Bengal, or if suitable deep draft cannot be found on the coast, it could be located in the sea and connected to the mainland by a bridge. Such a port has been constructed in Shanghai and it has been commissioned. The State Government has proposed to the Government of India that the Government of India should take up such a port project. Government of India has accepted the proposal, and had directed the Ministry of Shipping to get a study done. The Ministry is in the process of selecting a consultant firm which will carry out this study to identify a suitable location, prepare a design and also prepare cost estimate.

Along with ports, another very significant part of infrastructure required for development is the road transport network. West Bengal has a number of national highways passing through the State. Out of this, the entire stretch of NH 2 falling within West Bengal, NH 6 from Kolkata to Kharagpur, and NH 60 from Kharagpur to the Orissa border, have been 4-laned under the National Highway Development Programme (NHDP). The impact of the 4-laning of NH 2 and NH 6 is clearly visible. Work on 4-laning of NH 41 from Kolaghat to Haldia is going on. Other projects which are likely to be taken up soon include NH 31 passing through North Bengal under the Silchar-Porbandar East-West Corridor project, NH 117 from Kona to Netaji Subhas Docks, NH 35 from Barasat to Petrapole and NH 31 from Kolkata to Dalkhola.

Of these, upgradation of NH 34 to 4-lane status is a major infrastructure requirement. This highway is the backbone of West Bengal connecting Kolkata and South Bengal to North Bengal. However, in order to complete the link all the way to the southernmost parts of the State, it is necessary to have a highway system through South 24 Parganas, connecting NH 31 from Barasat to Namkhana. With Diamond Harbour Road being converted to NH 117, one part of this link will be established when NH 117 is upgraded from Joka or Bishnupur upto Namkhana. In order to complete the link, what is needed is a highway from Barasat, passing through South 24 Parganas upto a point on NH 117. since there is no existing highway on this alignment, this has to be taken up as a Greenfield project. It would be difficult to get a greenfield project included in the NHDP, whose main focus is on upgradation of existing national highways. The State Government approached Government of India a number of times with the request to take up the project of construction of this new Highway as Greenfield project but such endeavour didi not succeed. The State Government therefore took up a plan for construction of an Eastern Link Highway, with private sector investment, starting from a suitable point on NH 31, upto Usthi on NH 117, and then from Usthi to Raichak. From Usthi upgraded NH 117 would provide the link to Namkhana, while from Raichak the new road would be connected to Haldia by a bridge over the Hooghly River to Kukrahati.

The third major area of infrastructure is the railway network. West Bengal has a reasonable wide railway network, comprising Eastern Railway, South Eastern Railway, and North-East Frontier Railway. In particular, Haldia is linked to the main Howrah-Kharagpur trunk line, by a railway line from Panskura to Haldia. At present most of this stretch is still single-line, and about 14 km of length from Panskura to Rajagoda is double-line. The State Government is actively pursuing with the Ministry of Railways for the completion of double-line upto Haldia, since this is a pressing requirement of the industries in Haldia.

However, the most important railway project for the future development of the Haldia-Nandigram region is the completion of the dedicated rail freight corridor from Delhi to Howrah, and then its extension to Haldia. The freight corridor project has been taken up by the Government of India and is under implementation. The State Government is also examining the possibility of a link to Nandigram from the Tamluk-Digha line.

To sum up, the three most important infrastructure requirements for a major industrial cluster, especially a chemical hub, are port facilities; roads and highways; and railway connectivity. The State Government, while planning to develop the Haldia-Nandigram region as one of India’s biggest industrial hubs, has also taken into account the infrastructure requirements to make this plan a reality. Extension of port facilities in the Haldia-Nandigram region in the short-term and construction of a deepwater port in the long-term is being taken up with the help of the Government of India. Development of the railway connectivity and dedicated freight corridor linking Haldia-Nandigram region to the rest of the country is also being implemented with the help of the Government of India. The new highway, which is the third component of tthis troika, and is a greenfield project along a new alignment, is being implemented through a public-private partnership model, because it would be difficult and time consuming to get a greenfield alignment included in the National Highway Development Programme.

Recent Industrial Development Policies adopted by Government of India

SEZs: Government of India adopted a policy to set up Special Economic Zones in the country in the early 1990s. Initially, the SEZ policy was included in the Export-Import Policy announced by the Government of India every five years. To give a boost to this SEZ policy, Government of India also declared all existing Free Trade Zones set up by them earlier as SEZs. Thus Falta FTZ in West Bengal was declared as a SEZ.

Thereafter, Government of India decided to enact a separate SEZ legislation, in order to give a statutory guarantee to the various benefits and concessions offered to SEZ developers and industrial units set up inside SEZs. The central SEZ act was enacted in 2005, and Rules under the Act were also published in 2005. There are a number of fiscal concessions offered in the Act to developers and units, including excise duty exemption, customs duty exemption and income tax exemption.

MCIEs: In 2004 Government of India took a decision to set up Mega Chemical Industrial Estates (MCIEs) in the country, in order to galvanise growth of the chemical industry sector. To identify suitable locations for the MCIEs, the Department of Chemicals and Petrochemicals (DoCP) under the Ministry of Chemicals and Fertilisers appointed a consultant. This consultan firm, M/S Mott Mcdonald, studied various locations in Gujrat, Maharashtra, Karanataka, Kerala, Tamil Nadu, Andhra Pradesh, Orissa and West Bengal. All the states were asked to make presentations to the consultants. After the study, the consultant firm short-listed Haldia as a suitable location. This was communicated to Chief Minister, West Bnegal by Union Minister for Chemicals and Fertilisers in a letter dated 17th April 2006.

PCPIRs: In a parallel development, in 2005, a group of NRIs in the USA, holding senior professional and business positions, also showed interest in facilitating American foreign direct investment into India, and they selected the chemicals and petrochemicals sector as sector which could attract such investment. Following discussions with them, Government of India accepted their suggestion that the best way to attract foreign investment is to create high quality infrastructure. It was decided that it was not enough to just focus on the chemicals industry, but the focus should be enlarges to include the petroleum sector (e.g. refineries) and the petrochemicals sector.

It was also felt that it is not enough to create modern infrastructure only within mega industrial estates, and instead a whole region, comprising the industrial estates and the surrounding non-industrial area, should be treated as an Investment Region. Infrastructure development should be taken up for the whole Investment Region. Infrastructure development should be taken up for the whole Investment Region, which would include not only the areas earmarked for manufacturing (i.e. the industrial estates) but also the surrounding residential and agricultural areas. Infrastructure should include not only industrial estates, but also roads, highways, railways, ports, telecommunications, as well as social, educational and health infrastructure. It was also accepted that a significant portion of this investment in infrastructure would have to come from Government of India.

Task Force for PCPIR: Accordingly, Government of India enlarged the concept of a Mega Chemical Industrial Estate and adopted a policy to create Petroleum, Chemicals and Petrochemicals Investment Regions (PCPIRs) in selected locations in India. Since the investments required for infrastructure creation would have to come from a number of Ministries, it was decided to set up a Task Force in the Prime Minister’s Office to examine and finalise the terms and content of a PCPIR policy.

This Task Force was chaired by Principal Secretary to Prime Minister, and its members were Secretaries of the concerned Ministers; the Chairman Railway Board; the Chairman of IOC, ONGC, GAIL and HPCL; and Chief Secretaries of a number of States including West Bengal. The representatives of the NRI group were also members. The Task Force met a number of times in 2006 in order to discuss and formulate a draft PCPIR Policy.

In June 2006, the NRI group arranged for presentations to be made by Government of India to American chemical and petrochemical companies in the USA. The NRI Group invited the Government of West Bengal to join the delegation and make a presentation. Chief Secretary, Government of West Bengal made a presentation to the American companies highlighting the investment opportunities in West Bengal and the advantages that the State offers as a location for chemicals and petrochemicals industries.

The Task Force finalized its recommendations about the PCPIR Policy of the Government of India and submitted it to the concerned Ministry. The Policy has been processed by the Department of Chemicals and Petrochemicals, which is the Nodal Ministry for PCPIRs, and it is now awaiting approval of the Cabinet.

Major Features of the PCPIR Policy

The Policy Objectives, as laid down in the draft policy prepared by the Task Force, states:

“The Petroleum, Chemicals and Petrochemical industry in India is well established and has recorded a steady growth over the years. The industry offers a wide scope for development and contributes positively to economic growth and regional development. The future outlook for the industry is bright with positive developments anticipated in various chemical sub sectors.
To promote investment in this sector and make the country an important hub for both domestic and international markets, the Government has decided to attract major investment, both domestic and foreign, by providing a transparent and investment friendly policy and facility regime under which integrated Petroleum, Chemicals and Petroleum Investment Regions (PCPIRs) may be set up. The PCPIRs would reap the benefits of co-siting, networking and greater efficiency through the use of common infrastructure, and provide a competitive environment conducive for setting up businesses. They would thus result in a boost to manufacturing, augmentation of exports and generation of employment.”

Some of the major features of the draft PCPIR Policy formulated by the Task Force in Prime Minister’s Office are as follows:
The area of the overall Investment Region should be about 250 sq. kilometers, i.e. about 62,500 acres. Out of this, only 40%, i.e. about 25,000 acres should be meant for industries. The rest of the area will consist of existing towns, villages, settlements, agricultural land etc. which will not come under industries.

Govt. of India will contribute to the infrastructure through construction of roads and highways, railway links, port facilities, and telecommunications. State Government will contribute by facilitating power and water linkages. The development of infrastructure inside the industrial areas, i.e. land development, internal roads, effluent treatment, drainage and sewerage etc. will be done by private sector investment. The entire Investment Region, including existing habitations, will benefit from the improved infrastructure. The infrastructure to be provided will also address health, safety and environment concerns.

There should be a Master Plan for the entire Investment Region, which should be prepared by the State Government, and submitted for approval of Government of India.

Any State can decide to set up a PCPIR. A State which wants to develop a PCPIR has to apply in prescribed format to the Department of Chemicals and Petrochemicals, Government of India. After examination and processing of the application by DoCP, it will be placed before a High Powered Committee, chaired by Principal Secretary to Prime Minister. The other members of the High Powered Committee are the Secretaries of the following Ministries/Departments of the Government of India: Petroleum and Economic Affairs; Railways; Shipping; Road Transport and Highways; Civil Aviation; Environment and Forests; and Chemicals and Petrochemicals. Member Secretary of the Planning Commission is also a member. The Secretary, Department of Chemicals and Petrochemicals will be the convenor of the Committee. The Committee will examine the application, ascertain the requirement of infrastructure, obtain the commitments of the concerned Ministries of the Government of India to create the required infrastructure, and thereafter submit the application to the Cabinet for approval, clearly stating the commitments of Government of India to the provision of infrastructure.

After obtaining Cabinet approval, the Govt. of India will notify the PCPIR under its PCPIR Policy.
On receipt of notification from the Govt. of India, the concerned State Government will also notify the Petroleum, Chemicals and Petrochemicals Investment Region (PCPIR) under suitable law.

In summary, a PCPIR envisages setting up of mega industrial estates within a larger area, and provision of top quality infrastructure inside the industrial estates and also in the non-industrial areas outside the industrial estates. A private sector developer may be selected to develop the infrastructure inside the industrial estates, and this infrastructure would include internal land development, internal roads, internal power supply, internal water supply, drainage and sewerage, effluent treatment, marine outfall, commercial and residential facilities. The land inside the estates could be leased to the private sector developer, who in turn would sub-lease to the individual industrial units under an approval system. The existing habitations would remain outside the industrial units estates, and would not be leased to the private sector developer. Infrastructure outside the industrial estates would be developed by the Government of India and the State Government. The Government of India would provide port facilities, rail connectivity, road and national highway connectivity, and telecommunications facilities to the industrial estates and the surrounding non-industrial areas. The State Government would facilitate power supply and water supply arrangements.

The underlying principle of the PCPIR Policy adopted by the Task Force is that incentives should primarily be based on infrastructure support and not fiscal concessions. Thus the Policy, while it proposes some tax benefits to the developer, does not envisage any specific fiscal benefits for the industrial units which are set up in the PCPIR. It is expected that the industrial units would come up inside Special Economic Zones, located within the overall area identified as the Investment Region, and thereby become eligible for the fiscal benefits available under the central SEZ Act, 2005.

Response of the Government of West Bengal

The Government of West Bengal has taken due note of the SEZ Act and the proposed PCPIR Policy of the Government of India, and the various fiscal benefits conferred or proposed to be conferred on the developers of SEZs and PCPIRs. It has also taken note of the fact that Haldia has been short-listed as a location. It is felt that selection of the Haldia region as a PCPIR and setting up industrial estates in the form of SEZs within the PCPIR will attract significant manufacturing investments and bring about growth and development in that area. Moreover, if this region is selected as a PCPIR, there will be major investment by Government of India for road and rail connectivity, port facilities, and telecommunications. The State Government also noted because of its port and manufacturing units such as Haldia Refinery, Haldia Petrochemicals, Mitsubishi Chemicals, South Asia Petrochem etc.

On the other hand, if the State Government did not support these initiatives and decided that there should not be a PCPIR, supported by SEZs inside the PCPIR, then West Bengal would thereby be deprived of the advantage of the tax concessions given by Government of India for these projects, and industries and investment would go to other States who are allowing the setting up of SEZs and PCPIRs.

The State Government also took note of the possibilities of the downstream growth of small and medium enterprises in the petrochemical sector. There are already 950 downstream units of Haldia Petrochemicals, with investment of about Rs.1230 crores, employing directly and indirectly about 165000 persons.

In the context of the above policy issues, the State Government decided to develop a PCPIR around Haldia, with two SEZs, one fully dedicated to the chemicals industry, and the other to be multi-product, i.e. chemicals as well as other industries. Given the requirement of port facilities, it is not possible to consider establishment of the PCPIR in the interior parts of the State. It was proposed to identify an area of about 250 square kilometers around the port city of Haldia as the Investment Region, and to set up two SEZs within this Investment Region. It was also decided that the area of the two SEZs should be such that the total area earmarked for industrial activity would fulfill the requirements of the PCPIR Policy of the Government of India, which stipulated that about 40% of the Investment Region, (i.e. about 25,000 acres) should be identified for manufacturing and processing activities.

Selection of the General Location of the PCPIR

As already mentioned, Haldia as a location has been short listed in the study carried out by the Government of India. For the large area to be selected as the PCPIR area it was seen that the areas around Haldia tow already had many industries and there were also natural constraints, caused by situation, in developing additional port facilities in Haldia. It was thus felt that it would be appropriate to locate one of the SEZs in a selected area of Nandigram I Block, subject to identification of suitable land for this purpose. The choice of Nandigram I Block area was felt to be suitable because it also has the waterfront along the Hooghly River, and thus would provide scope for extension of the port facilities on the riverside. Port facilities would be an essential requirement for the new manufacturing investments that can be expected to be set up in a PCPIR. It was also felt that this was an opportunity to extend the development which has taken place in Haldia to the Nandigram area, by building infrastructure (inclusive of bridge over the Haldi river, thereby providing direct road connectivity of Nandigram to Haldia and to Kolkata via the proposed Raichak-Kukrahati bridge) and generating employment and incomes. Despite close proximity to Haldia, the effect of the growth of industries and services in Haldia has not reached areas under Nandigram P.S. to the desirable extent. Extension of industrial growth to Nandigram I Block would also create the scope to thereafter extend the benefits of industrial development further down the riverside to Khejuri Block in Contai Sub-Division and to Nandigram II Block.

Based on the above factors, the State Government decided to locate the approximately 25,000 acres required to be earmarked as manufacturing zones in order to fulfill the yardsticks laid down in the PCPIR Policy in two large SEZs, one of 12,500 acres in the Haldia side of Haldi River, and another of 10,000 acres in the Nandigram side of Haldi River. This decision covered only the general location of the mega industrial estates, and the exact quantum of land available would have to be ascertained after local field level study and local consultations, the process of which is described below in a subsequent paragraph.

The subject of setting up a chemical hub (PCPIR) in Nandigram P.S. area was also examined by the Standing Committee on Commerce and Industries Reconstruction and public Enterprise of the 14th West Bengal Legislative Assembly, chaired by Shri Sudip Bandopadhyay, MLA. The report of the findings of the Committee was presented to the Assembly on 28th November 2006. On the proposed location in Nandigram, the Report states (page 7) as follows:
“The Committee visited the site earmarked for commissioning CHEMICAL HUB over an area of 10,500 acres of land under Nandigram P.S. along the bank of the River Haldi. Adjacent to it another 12,000 acres of land was also earmarked for setting up of other industrial units under SER (sic) projects.

The lands covering along the side of the River for the proposed projects with locational advantages, Port facilities to be built up and all requisite infrastructure to be developed and having enormous possibilities and bright prospects appear to the Committee viable and feasible for commissioning projects. The Committee thinks it would add impetus to change radically the existing industrial scenario and with selection of the site, there would every possibility of Haldia of becoming a successful convenient ideal investment destination in future and Haldia would be a brand name in India.”

Agreement for an Anchor Developer

In order to develop the industrial infrastructure inside the SEZs, the State Government has entered into an agreement with New Kolkata International Development Private Limited (NKID) in July 2006. the NKID is a Consortium of the following companies:- (i) Bright Equity Group Limited, a company of the Salim Group of Indonesia; (ii) Universal Success Enterprise Limited ; and (iii) Unitech Limited of India. NKID has to fulfill the role of anchor developer for the two SEZs, which will comprise the manufacturing area within the overall PCPIR area. There are many other components of the NKID agreement, other than the establishment of two SEZs, and the major features of the agreement are shown in Annexure I.

Agreement for an Anchor Investor

The State Government has also signed an agreement with Indian Oil Corporation Limited to be an anchor investor in the PCPIR. IOC has signed an agreement for setting up a 15 million tonne refinery, a paraxylene unit and other units in the downstream sectors.

Implementation – Identification of the Specific Location of the SEZs

Selection of the general location of the SEZs is however only the preliminary step in the process of land identification. The selection of the general location has to be followed by a detailed and thorough process of identification of the specific lands within the general area, and this process of identification is the first step of project implementation. This process involves a field level study to ascertain the quality of the land in the selected Blocks, and identification of the individual plots of lands which can be utilized for the project, excluding existing villages and settlements, religious places, schools, health centres and other public places. The field level investigation has to be accompanied by a process of consultation and engagement with the local people and their elected representatives, starting from the village level. There also has to be a process of building a broad consensus by holding meetings with political parties at the Block level, district level and also at the State level. The interaction with the local population is most important, since they are the biggest stakeholders of the development project, and their support for the project is an essential requirement. In particular, discussion with the cultivators of any agricultural land is essential, so that the project details, the compensation package and the schemes for rehabilitation and alternative livelihood, and the benefits of industrial growth around their area can be properly explained to them. After the completion of this process, i.e. after the land which can be actually available for setting up SEZs is identified, the process of purchase or acquisition can be taken up as the second step for project implementation.

The issue of actual selection of land was also examined by the Standing Committee on Commerce and Industries and Industrial Reconstruction and Public Enterprise of the 14th West Bengal Legislative Assembly. In its Report it is stated as follows:
“Another very pertinent question/aspect came to the Committee regarding acquisition of so huge lands (22,500 acres). The Committee desires that it would require more transparent explanation in regard to the character and classification of the allotment of the land from the district administration. The Committee, in this connection thinks that the farmers are to be provided all sorts of economic protection along with maximum possible financial support and fertile agricultural lands are to be kept protected,”

The interaction with the local population will reveal the quantum of land that can be actually utilized for the project, and it may so happen that this quantum of land is less than the quantum of land originally proposed. Also the land may be available in separate chunks. The project will then be revised to take into account actual land availability.

At present, the State Government is taking preparations to start the process of local level discussions and meetings. Until the State Government is satisfied that the land which can be utilized for the project has been properly identified with participation of the local population, and the compensation package is found to be satisfactory, the process of land acquisition will not be started. 100% of the compensation amount will be paid upfront immediately after the declaration of the award to the landowners and Bargadars.

The Socio-Economic impact of the NKID Project

Eastern Link Highway and other Roads
The construction of the 100 km Eastern Link Highway, which will link up Barasat By Pass to Utsi and then through NH – 117 to Raichak on the River Hooghly will be a major infrastructure project for development of the entire area between Barasat and Raichak. The four-lane Expressway will be passing through Rajarhat New Town and then trough Bhangar and Magrahat towards Usti. The road will open up large areas of South 24 Parganas, and create income and employment opportunities by improving accessibility and communication.
Despite its proximity to Kolkata, South 24 Parganas district is one of the most underdeveloped districts of West Bengal and it has also been included in the Rastriya Sama Vikash Yojana Program of Government of India.

The Eastern Link Highway would provide
*A bye-pass of Kolkata metropolitan area;
*Ring connectivity connecting NH 34 and NH 41;
*Fast access from the Airport to Haldia;
*Provide communication and accessibility to the interior parts of South 24 Parganas District;
*Would lead to creation of new economic activity in the district which is not agriculturally also very advanced due to non-availability of irrigation facility eitherfrom surface or under-ground sources.
*Would provide a road link to the proposed container port in Kulpi.

The Project also includes construction three other roads, which are extension of EM Bypass from Kamal Gazi to Purandarpur in Baruipur; construction of a road link from the EM Bypass to Jagadishpur which is the chosen location for the district headquarters of South 24 Parganas, and construction of a road link from Diamond Harbour Roadat Pailan to Jagadishpur. These road links will provide better access to the new district headquarters from different parts of the district.All the roads will be owned by the State Government. The private sector developer’s role is only to construct the roads in accordance with approved design and under supervision of the State Government. The developer’s also has the obligation to maintain the Eastern Link Highway for 15 years at their own cost.


The NKID project comprises of two major bridge projects. One bridge will be never the Hooghly River connecting Raichak in South 24 Parganas on Kukrahati in Purba Medinipur. This is a major infrastructure, and will provide fast connectivity to Haldia from Kolkata and the airport, and to NH 34 via the Eastern Link Highway. The other bridge will connect Haldia to Nandigram. Even today the Nandigram area remains unconnected to Haldia by a road, because there is no bridge over the Haldi river. For the people of Nandigram the only road connectivity to Haldia and also to Kolkata is via the bridge at Narghat. The new bridge will create much better connectivity and will be of substantial benefit to the people residing in Nandigram I and Nandigram II Blocks.The two bridges will be owned by the State Government. The developer’s role is only to construct the bridges in accordance with the approved design and under the supervision of the State Government. The developer also has the responsibility to maintain the bridges at their own cost for 15 years.


The two SEZs are expected to bring in significant investments in manufacturing, in the sectors of chemicals, petrochemicals, refineries on the one hand, and other engineering, textiles, automobiles etc. This would mean that the Haldia-Nandigram region would rank as one of India’s largest industrial hubs, and would create jobs and incomes for the people of the area. The chemical SEZ will be implemented as joint venture with WBIDC. In both SEZs, a minimum of 50% of the gross area will be used for industries, and another 25% will used for infrastructure related to manufacturing.


The various rehabilitation measures to be taken up and financed by NKID include payment of 25% of land cost as compensation to Bargadars, setting up of a construction of about 8000 shop stalls in South 24 Parganas and 12000 shop stalls in Purba Medinipur along the expressway in different growth centers. Priority for allotment of these stalls would be given to landlosers and Bargadars who would be losing their only source of livelihood due to acquisition of land. The Rehabilitation measures also include construction of four vocational training centres at Bhangar, Baruipur, Nandigram and Kakrahati with a total capacity of 5000 trainees every year. The NKID will run and maintain the vocational training centre for 5 years and offer training free of cost to land loser families. The basic objective of these training centers would provide skill development in various traders to increase their employability in the various SME industrial clusters and also would provide necessary training in construction activity related traders. This would ensure gainful employment of the landlosers in the various construction activities that would continue over next 10 to 15 years on a sustainable basis.While all necessary measures would be taken to avoid acquisition of any homestead, household but in case acquisition of some homesteads cannot be avoided under exceptional circumstances, the developer shall have to construct at its own cost residential buildings for proper rehabilitation of such displaced persons. In the Health City, it has been ensured that the benefit of the health care facility can be availed of by the socio-economically weaker section of the society free of cost.The project also has a component for creating irrigation facilities, which will help to increase cropping intensity of single-crop lands, and also bring new areas under cultivation.Within the project, 4 SME industrial estates will be developed by NKID, each of 100 acres, where land will be allotted to small scale entrepreneurs at reasonable cost which shall not exceed 10% of the cost of construction. These SME industrial estates will help to create employment locally.The Development Agreement with NKID Project has been conceived as a Public Private Partnership (PPP) whereby the State Government is ensuring the creation of infrastructure in terms of large dedicated industrial estates, SME industrial estates, highways and bridges, purchase of land for district headquarters and for setting up quality institutions, modern townships, irrigation facilities, training institutes and shop stalls for land losers, educational institutes and hospitals, for which State Government will not have to bear any cost. NKID will implement all of the above at their own cost.The future impact of these infrastructure, particularly the communication facilities, will also bring about development of vast hinterland and provide a boost to economic activity leading to job creation, income growth, urbanization and socio-economic development of this hinterland which will become easily accessible to Kolkata Metropolitan region through Eastern Link Expressway and connecting roads including EM Bypass extension and the bridges. At the same time, selection of the Haldia-Nandigram region as a PCPIR will bring in significant investment by the Government of India also in highways, railways, port facilities, telecommunications etc.

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