Tata Steel had urged Chhattisgarh government to return the money it had deposited for purchasing land in Bastar where company had planned to set up mega steel plant.

The steel major had announced that it had dropped the Bastar steel project. The company had signed an agreement with the state government in June 2005 for setting up 5.5 million tonne per annum (Mtpa) green-field integrated steel plant in Chhattisgarh’s Bastar district with an estimated cost of Rs 19,500 crore.

An amount of Rs 72.09 crore was deposited with the authorities for acquiring private land. Being a notified tribal area, the private party cannot acquire land in Bastar and the government had to acquire the land before allotting it on lease. The party has to bear the acquisition cost.

In all, 1,764 hectares of land from 1,707 land holders located in 10 villages in Bastar’s Lohandiguda block was marked for acquisition. The local district administration initiated the process and disbursed compensation to 70 per cent people.

However, the administration had not taken physical possession of the land. Hence, it was not allotted to Tata Steel. While the land allotment was getting delayed, the company lost the iron-ore mine in Bastar after failing to complete the prospecting work within stipulated time.

The two factors propelled Tata Steel to quit the Bastar plan. Since the company has not signed land lease agreement and taken possession of the land, it has now requested the state government to refund the money it had deposited for private land acquisition.

“The state government had received the letter from the Tata Steel and the amount would be refunded as per the rules, and procedures,” Sunil Mishra, Managing Director of Chhattisgarh State Industrial Development Corporation (CSIDC), said. The matter is under consideration with the government for final decision, he added.

Officials in the industry department said since 70 per cent compensation had been disbursed, the state government would acquire the land. The CSIDC would put it in its land bank and would use for mega projects in future.