Land Acquisition Woes Thwart India's Mega Refinery Plan With Saudi Aramco



Reuters

MUMBAI/NEW DELHI, May 17 (Reuters) - At the International Energy Forum in Delhi in April, the world's top oil producer Saudi Aramco inked a preliminary deal to partner with a consortium of Indian players to build a $44 billion refinery and petrochemical project on India's west coast.

The huge project was touted as a gamechanger for both parties - offering India steady fuel supplies and meeting Saudi Arabia's need to secure regular buyers for its oil. Despite the obvious benefits, though, the prospects for the plan - in the works since 2015 - are growing dimmer by the day.

Thousands of farmers oppose the refinery and are refusing to surrender land, fearing it could damage a region famed for its Alphonso mangoes, vast cashew plantations and fishing hamlets that boast bountiful catches of seafood.

"We earn enough to fulfil our needs and we do not want to surrender our lands for a refinery at any cost," says Sandesh Desai, standing amid his fruit-laden mango orchard in Nanar, a village in Ratnagiri district, some 400 km (250 miles) south of Mumbai.

Land acquisition has always been a contentious issue in rural India, where a majority of the population depends on farming for their livelihood. In 2008, for example, India's Tata Motors had to shelve plans for a car factory in an eastern state after facing widespread protests from farmers.

And while Prime Minister Narendra Modi has tried to ease land acquisition rules to jumpstart delayed projects worth tens of billions of dollars, the government has faced resistance to amending populist laws enacted by his predecessors.

Like Desai, a majority of the farmers from 14 villages around Ratnagiri that need to be relocated for the refinery project firmly oppose the plan, a state government official told Reuters.

Opposition politicians and even a local ally of Modi's Bhartiya Janta Party (BJP) support the farmer movement, complicating matters further for the government ahead of state and general elections in 2019.

The state government, which is responsible for acquiring the land for the project, has so far failed to secure even one acre of the roughly 15,000 acres needed for the refinery, Maharashtra Industries Minister Subhash Desai told Reuters.

"The state is not going to acquire land as a majority of the farmers are against the plan," said Desai, the minister, who is a member of the Shiv Sena, a regional party allied with the BJP in the Maharashtra state government. Under land acquisition rules at least 70 percent of the land owners need to provide consent for a project, he said.

Still, some believe that the opponents are only objecting to get better compensation packages for their land.

"Eventually all stakeholders will give their consent, but it will take time," said Ajay Singh Sengar, who heads a rival forum that supports the refinery project. A local government official in the area said he thought many farmers would agree to a deal once a compensation package was announced.

Job Promises

The Ratnagiri Refinery & Petrochemicals Ltd (RRPL), which is running the project, says the 1.2-million-barrel-per-day (bpd) refinery, and an integrated petrochemical site with a capacity of 18 million tonnes per year, will help create direct and indirect employment for up to 150,000 people, with jobs that pay better than agriculture or fishing.

But farmers say they have sufficient work in their orchards and fields.


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