JSW Steel to give free shares to the project-affected

01 Jun 2007

Mumbai: JSW Steel has announced a package that includes free shares to landholders who sell their land to JSW Bengal Steel, the Rs 35,000 crore, 10 million tonne steel plant proposed to be set up at Salboni in West Medinipur, around 200 km from Kolkata.

JSW Steel vice chairman and managing director Sajjan Jindal announced the package at a joint press briefing with West Bengal chief minister Buddhadeb Bhattacharjee at Writers'' Buildings, the state secretariat.

The offer of shares over and above the compensation package comes amid a raging debate about the impact of land acquisition on those losing land.

The JSW package for Bengal offers employment for at least one person per family losing land, compensation for land price (50 per cent in cash and 50 per cent annuity from Life Insurance Corporation) and free shares at par equivalent to the land price.

"Landlosers should be the owners of this plant. Because the project is coming in their area, they should be owners of the plant, and they must get benefit out of the development that happens there," said Jindal.

It isn''t a very big plot that JSW Steel is looking to acquire, 500 acres at the most. The rest is government-owned property. The project is unlikely to face resistance from farmers, and the plant should be ready by April of 2011. But most importantly, if this compensation package works, it will set a new benchmark, he said.

The company said the shares to be distributed to the project-displaced would be administered by a trust under the district magistrate or the West Bengal government and will have a lock-in period till the first phase of the plant is complete, ie, March 2011.

The West Bengal Industrial Development Corporation (WBIDC) has 11 per cent stake in JSW Bengal Steel, with the balance held by JSW group.

While around 740 families are expected to lose land, Jindal said the package is meant for landowners who earn an income from cultivation.

Of the total area of 4,800 acres needed for the project, 450-500 acres is private land and the rest, government land.

This is the first time that a company has announced that it will give shares to those losing land over and above a compensation package.

Public hearing for environment clearance will begin in August and Jindal expects to get possession of the land 2-3 months after that.