Rs 58-cr loss to Gujarat due to inappropriate land allotment to Adani firm

In its fifth report tabled before the Gujarat Assembly Wednesday, the Public Accounts Committee (PAC) has noted that owing to inappropriate classification of forest land transferred to Adani Chemicals in Kutch for Mundra Port and SEZ by the forest and environment department, the company paid the state government Rs 58.64 crore less.

The PAC has recommended to recover the full amount from the company in three months and to take action against officials concerned for inappropriate classification of the land, causing loss to the state government and “undue” benefit to the company.

In its report, the PAC — headed by Congress MLA Punja Vansh — has cited an audit report of the Comptroller and Auditor General of India that noted the “undue” benefit of Rs 58.64 crore to the company due to the inappropriate classification of land.

As per the PAC report, in connection with a proposal of Adani Chemicals Limited, the Central government had in 2004 given an in-principle approval to allocate 1,840 hectares and 168.42 hectares of land in Mundra and Dhrab villages respectively of Kutch district. The Supreme Court, in a judgment dated March 28, 2008, classified the forests of India in six situational categories while also fixing its net present value (NPV).

The report states that in January 2009, the state government presented a new proposed scheme of Messrs. Adani before the central government for its sanction and the Central government had granted an in-principle approval in February 2009. As per the judgment of the Supreme Court regarding fixing NPV as per six categories of forests, the ones in Kutch were classified under Eco Class II (with NPV of Rs 7.30 lakh per hectare) and Eco Class IV (with NPV of Rs 4.30 lakh per hectare).

In December 2008, the Conservator of Forests, Bhuj, had in his inspection report observed that the land in question was mud flat and the creek area was full of mangroves, the report said. Despite this, it adds that the deputy conservator of forest (Kutch East) had considered this land under Eco Class IV and recovered Rs 87.97 crore as NPV of 2008.42 hectare forest land from the company.

The PAC report further noted that the forest & environment department had in a written reply sent to the committee stated that the transferred land indeed comes under Eco Class IV.

The report also notes its meeting dated September 25, 2019, in which a representative of the department had denied that the land in question falls under Eco Class II. It also stated that the NPV of the land, as Eco Class IV classification, was fixed as per the 2008 judgment of the Supreme Court that was recovered from the company after being approved by the Central government.

The PAC records, “The committee believes that instead of recovering NPV as per Eco Class II from Messrs. Adani for the change of purpose of forest land for Mundra Port and SEZ, the department has recovered NPV as per Eco Class IV. This decision of the department has resulted in Rs 58.67 crore less recovery to the government.”

It has recommended to take action against responsible officer/officials for inappropriate classification of land, to recover NPV as per Eco Class II from the company within three months and to inform the committee after recovery.

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