Ranchi, Oct 24 (IANS) Tata Steel's massive plant at Jamshedpur could be in for trouble with the Jharkhand government deciding to review the renewal lease deed signed last year.
Tata Steel, which just clinched a $8 billion-deal to acquire Anglo-Dutch steel giant Corus, had set up the Jamshedpur plant, 130 km from here, in 1907. The lease for the land, which runs into thousands of acres, is renewed every 30 years.
In August last year, the Arjun Munda-led National Democratic Alliance government renewed the lease, which was pending since 1996, when Jharkhand was part of Bihar.
Now, the United Progressive Alliance (UPA) state government has decided to review the renewal of lease.
'The departmental secretary has been asked to review the renewal of lease agreement which took place last year. The officials have been asked to review the minutest detail of the lease and prepare a report of it,' said Minister for Land and Revenue Dulal Bhuiya.
The review will also include the revenue aspect, he added. It would scrutinise whether the government was set to lose any revenue after renewal of the lease.
The UPA had been demanding an inquiry into renewal of the lease. A special debate had taken place in the state assembly on the issue.
While renewing the lease last year, Tata Steel had agreed to pay Rs.1.5 billion for a mega sports complex and Rs.250 million every year till 30 years for the state's health sector to improve the condition of Below Poverty Line (BPL) people.
However, Tata Steel was charged with violation of the provisions, which included subletting of the land given under lease.
'Even at the time of the renewal of the lease the land and revenue department had demanded Rs.3 billion from Tata Steel. But the amount was converted in other forms which caused loss of revenue to the state government,' said an official.
An official said the land and revenue minister, who belongs to the Jharkhand Mukti Morcha (JMM), got approval of party supremo and Coal Minister Shibu Soren for the review of the lease.
Tata Steel has not reacted on the issue.
Former chief minister Arjun Munda told IANS: 'The UPA government made its view clear on the very first day when it announced it would review the memorandum of understanding signed during my government.
'The state government can review it, but it should not be done with any motive or forgone decision.'
He said: 'The approach of the state government will send a wrong message to investors and Jharkhand will have to pay badly for that in the future.'