Changi sends alert on land fee thorn

October 7, 2009
Singapore Democrats

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Sambit Saha
The Telegraph

Changi Airport of Singapore has expressed concern over at least two administrative issues related to land for the proposed airport city at Andal in Burdwan.

The subjects vexing Changi, a partner in the Rs 10,000-crore project, are not the usual protests against land acquisition but the quantum of an administrative fee and a loan promised to relocate high-tension power lines from the area earmarked for the airport city.

“These issues could materially impact the project’s viability and development plan unless sorted out at the earliest,” according to a letter from Changi to the local developers, Bengal Aerotropolis Projects Ltd (BAPL).

The Telegraph has learnt that Eugene Gan, the deputy CEO of Changi Airport International, wrote to BAPL chief executive Subrata Paul on August 25, raising the two issues.

The developer, in turn, has written to chief minister Buddhadeb Bhattacharjee, requesting his intervention.

An element of politics also appears to be at play. Burdwan is the cradle of industry minister Nirupam Sen, while the department dealing with one of the issues raised by Changi is headed by Abdur Rezzak Mollah, the Bengal industrialisation policy critic recently at the centre of the Vedic Village controversy.

Soon after Changi joined BAPL as equity shareholder in July this year, the Singapore investor felt that the administrative cost demanded by the land department was high. Administrative cost covers expenses for official purposes to carry out land acquisition, excluding the actual land price.

The investors want this cost to be lowered from 10 per cent to 1 per cent of the land price. At 10 per cent, they will have to pay Rs 20-25 crore for the first-phase requirement of 2,182 acres. The entire project will need 3,100 acres.

The investors have offered to cover the actual administrative cost, which they think will be much less than that at 10 per cent.

The company feels that 10 per cent is appropriate when the size of the land is small but there should be a staggered rate for large acquisitions.

Sources said the commerce and industry department had mooted slab-based administrative charges, proposing 1 per cent for acquisition over 1,000 acres. However, the land department has not agreed to the proposal, the sources added.

Mollah, the land minister, today said he personally had not received any request for reduction of the charge. “It has not reached my table. I don’t know,” he said.

For BAPL, the land acquisition has been relatively trouble-free so far. The company is offering land for land, annuity, cash and vocational training.

The other issue is the delay in sanctioning a Rs 50-crore soft loan to relocate high-tension power lines.

BAPL had requested the state government to bear the cost, citing the airport city as a public infrastructure project, but the government did not agree. As a compromise, the government offered the loan which should be returned in six years.

Although the loan was sanctioned in February, it has not been disbursed yet for some unexplained reason.

Partho Ghosh, BAPL director, said the company was hopeful of a speedy resolution.