Haryana approves Reliance Industries' quitting SEZ;

Haryana approves Reliance Industries' quitting SEZ;

to give Rs. 343 crore for land

Chandigarh: Reliance Industries' proposal to opt out of Gurgaon special economic zone (SEZ) has been approved by the Haryana government, which hyas said it will reimburse Rs. 343 crore to the company.

The amount offered by the state government for taking back the land is lower than Rs. 1,172 crore demanded by Reliance.

Chief Minister Bhupinder Singh Hooda told reporters in Chandigarh on Friday that RIL's proposal was approved by the state Cabinet at its meeting here.

Mukesh Ambani-led RIL had sought the reversal of 1,383.68 acres - from Reliance Haryana SEZ Ltd (RHSL) to the Haryana State Industrial & Infrastructure Development Corporation (HSIIDC) - saying that the project had become unviable.

An official release said the SEZ Project at Gurgaon had "been rendered economically unviable due to the mid-term corrections in the SEZ Policy viz. imposition of the Minimum Alternate Tax (MAT), withdrawal of the Tax holiday, slowdown in the global economy, prohibitively high prices of land and other problems associated with aggregation of land through private negotiations".

Sensing the difficulties posed in this behalf, the Chief Minister had requested Reliance to return the HSIIDC land, it said.

"As such, RHSL offered to return the HSIIDC land and abandon the SEZ project in Gurgaon vide their letter of January 2012," the release said.

"RHSL had requested for refund of the amount paid by them to the HSIIDC and re-imbursement of expenditure incurred on the site, apart from interest on the said amount aggregating to Rs. 1,172 crore," it added.

The proposal was considered at the level of the Haryana Investment Promotion Board, headed by the Chief Minister, after examining all the legal aspects of the Joint Venture Agreement, it said, adding that HIPB recommended acceptance of the return offer strictly in accordance with the provisions of the JV agreement.

"Accordingly, the Haryana Cabinet today approved the return of the land to HSIIDC, in lieu of payment of an amount of Rs. 343.51 crore to RHSL as against Rs. 399.85 crore paid by RHSL at the time of transfer of land and the demand of Rs. 1,172 crore by RHSL," the order noted.

"The claims on account of Administrative charges forming price of the subject, refund of the Stamp Duty, re-imbursement of development expenditure and interest amount have not been accepted. The refund amount has been worked out strictly as per the terms of the Joint Venture Agreement date 19th June 2006 signed between the HSIIDC and RVL."

HSIIDC and Reliance Ventures Ltd, wholly-owned subsidiary of RIL, had entered into a JV Agreement on June 19, 2006 for setting up of the SEZ over an area of 25,000 acres in Gurgaon and Jhajjar districts.

HSIIDC had transferred about 1,383.68 acres at Village Garhi Harsaru to the special purpose vehicle floated by HSIIDC and RVL for implementing the project - Reliance Haryana SEZ Ltd, for about Rs. 399.85 crore.

The project configuration was subsequently changed to SEZ in Gurgaon district over 12,500 acres and a Model Economic Township over 12,500 acres in Jhajjar district. Reliance was able to purchase, and aggregate, about 7,100 acres in Jhajjar, and another about 1200 acres in Gurgaon, but it was not contiguous.

RHSL also paid Annuity to the landowners whose land was acquired/procured in Gurgaon & Jhajjar amounting to Rs. 50.71 crore up to March 31, 2013. It included Rs. 17.61 crore on HSIIDC land in Gurgaon and balance amount of about Rs. 33.10 crore in Jhajjar where they had procured land through direct negotiations.

Soon after the Haryana government received the land return offer from RHSL, it has been engaged in discussions with the Union Ministry of Commerce & Industry for the best utilisation of the subject land, the release said.

"It has been agreed with the Ministry of Commerce & Industry to use the subject land for establishment of a state of the art Global City Project as a send investment node under the Delhi Mumbai Industrial Corridor (DMIC) Project," it further said.

"The Global City is envisaged to be developed as a high value added manufacturing infused area which, apart from adding to the economic development, would also help in generating skilled employment in Haryana."

Mr Hooda said the land acquired for the Reliance project would not be returned to the original owners of the land. The new project is envisaged to be an integrated model township in Gurgaon, comprising of the exhibition and convention centre, high value innovation and knowledge industries, central business district and township facilities.

The Global City Project is proposed to be developed jointly by the HSIIDC and the DMIC Trust/DMICDC through a special purpose vehicle (SPV) with equity participation by DMIC Trust and HSIIDC in equal proportions.

CENTRE APPROVES DELHI-BAHADURGARH METRO LINK, DWARKA TO NAJAFGARH LINK ALSO, IN FUTURE BAHADURGAH & NAJAFGARH WILL CONNECTED TO MAKE LOOP

7 Aug, 2012, 08.33PM IST,

Centre approves Delhi-Bahadurgarh metro link

Dwarka to Najafgarh ALSO

IN FUTURE BAHADURGAH & NAJAFGARH WILL CONNECTED TO MAKE LOOP

CHANDIGARH: In a step that will improve commuting in National Capital Region, the Union government has approved extension of Delhi Metro from Mundka to Bahadurgarh in Haryana. The 11.18 kms metro stretch will have seven stations at Mundka Industrial Area, Ghevra, Tikri Kalan, Tikri Border, Modern Industrial Estate, Bahadurgarh Bus Stand and City Park between Mundka Bahadurgarh.

The construction work of this project will start in the year 2012 and would be completed by month of March, 2016. On the completion of the project, it will provide commuting facilities to the passengers from Bahadurgarh to Delhi and vice-versa. In the year 2016, about 96,000 passengers will be using the Metro facility and by the year 2021-2022, the metro users are expected to go upto 1,48,000.

The sanction has come as a short in arm for Haryana government that have been endeavoring for metro link to NCR falling in Haryana. The project would provide metro link to third district Jhajjar falling in NCR in Haryana. The two-other bordering districts to national capital Gurgaon and Faridabad already have metro connection.

The project was approved today at the high-level meeting of Empowered Group of Ministers headed by union defence minister AK Antony in New Delhi today. It will be third Metro route to Haryana as it already has Metro connections to Gurgaon and Faridabad. Gurgaon route is already functional and the work is in advance stage for Faridabad.

The project would cost Rs1991 crore. Seven metro stations would be set up at Mundka Industrial Area, Ghevra, Tikri Kalan, Tikri Border, Modern Industrial Estate, Bahadurgarh Bus Stand and City Park between Mundka Bahadurgarh.

The Haryana segment in the approved extension would be 4.875 kms and Delhi segment would be 6.307 kms. Out of the total project cost an expenditure of Rs 912. crore will be for the Haryana segment whereas an expenditure of Rs 1079 crore would be for Delhi segment.

Haryana Government will bear a cost of Rs 788 crore for this project. Haryana Government would also provide 10 hectares of land in Haryana portion for the setting up of Metro Depot.

The Empowered Group of Ministers (EGoM) gave its approval to a 5.50km link from Dwarka to Najafgarh which will cost Rs 1,070 crore.

This corridor is targeted for completion by DMRC in three years by 2015 and the estimated ridership will be 48,000 passengers per day in 2015 and 61,000 passengers per day in 2022.

Haryana plans cargo airport in Meham

Haryana plans cargo airport in Meham

GURGAON: Haryana has asked the civil aviation ministry to clear its proposal for building a Greenfield cargo airport for international operations at Meham in Rohtak district.

The proposal, sent by the state through Haryana State Industrial and Infrastructure Development Corporation (HSIIDC), came up for discussion during chief minister Bhupinder Singh Hooda's meeting with civil aviation minister Ajit Singh on Friday.

An area of about 2,770 acres has already been identified for the project and the land would be purchased from private parties.

The state government said the displacement of population would be assessed and taken care of as per Haryana's Rehabilitation and Resettlement (R&R) Policy.

Hooda was told that the proposal has been examined in the Ministry of Civil Aviation in consultation with Airports Authority of India and Directorate General of Civil Aviation for grant of site clearance and has been recommended by both the organizations.

Hooda also underlined the need for having civil airports in Karnal and Hisar and offered to provide land for these projects.

Ajit Singh assured Hooda that the Centre would consider the state's request positively and asked the Airport Authority of India to send a team for conducting a land survey in collaboration with state officials.

NCR Constituent Areas

NCR Constituent Areas

National Capital Region (NCR) is one of the first experimented Regions of the country. It is a unique example for inter-state regional development planning for a region with Nation Capital as its core. The National Capital Region as notified covers an area of about 33,578 sq kms falling in the territorial jurisdictions of four State Governments namely, National Capital Territory of Delhi, Haryana, UP, and Rajasthan. It is one of the largest National Capital Region of the World and constitutes about 1.60% of the country’s land area, about 86% of the total area of Kerala State and its area is more than the combined area of three States of Tripura, Nagaland and Sikkim.
NCR is characterized by the presence of highly ecologically sensitive areas like extension of Aravalli ridge, Forests, Wild life and Bird sanctuaries, rivers Ganga, Yamuna and Hindon, fertile cultivated and is a dynamic rural-urban region being the home of 371 lakhs people living in 108 towns of which 17 are class I cities and more than 7500 rural settlements.
The four constituent Sub-Regions of NCR are given below:
1) The Haryana Sub-Region comprises of nine districts, that is, Faridabad, Gurgaon, Mewat, Rohtak, Sonepat, Rewari, Jhajjhar (Bhadurgarh), Panipat and Palwal together constituting about 40% (13,413 sq. kms.) of the Region;
2) The Uttar Pradesh Sub-Region comprises of five districts, that is, Meerut, Ghaziabad, Gautam Budha Nagar, Bulandshahr, and Baghpat together constituting about 32% ( 10,853 sq. kms.) of the Region;
3) The Rajasthan Sub-Region comprises of Alwar district constituting about 23% (7,829 sq. kms.) of the Region ; &
4) The NCT of Delhi constituting about 5% (1,483 sq. kms.) of the Region.

Competition Commission imposes heavy penalties for abuse of dominance

Competition - India
Competition Commission imposes heavy penalties for abuse of dominance

September 22 2011
Background
In its August 12 2011 decision in Belaire Owners' Association v DLF Limited (19/2010) the Competition Commission of India imposed a penalty on DLF Ltd, India's largest real estate developer. The penalty comprised 7% of DLF's average turnover for the last three years, amounting to Rs6.3 billion, and was imposed for abuse of DLF's dominant position following the inclusion of unfair conditions in agreements it concluded with a number of flat buyers. The commission also directed DLF to cease and desist from formulating and imposing such unfair conditions in its agreements with buyers in Gurgaon, and to modify unfair conditions imposed on its buyers within three months of the date of receipt of this order.
Facts
In its initial order (passed under Section 26(1) of the Competition Act 2002), the commission had formed an opinion that a prima facie case existed and directed the director general to investigate the matter. This view was challenged by DLF before the Competition Appellate Tribunal, raising issues of jurisdiction, among other things. On August 18 2010 the tribunal refused to intervene at this stage and observed that DLF could raise these issues before the commission (for further details please see "Competition Appellate Tribunal allows Competition Commission to continue DLF probe").
In turn, Belaire Owners' Association argued that DLF had imposed "arbitrary, unfair and unreasonable conditions" on the buyers that had been allocated apartments for the Belaire housing complex (located in Gurgaon and under construction by DLF). It argued that such conditions amounted to abuse of DLF's dominant position in the relevant market - namely, high-end residential accommodation in Gurgaon. Some of the unfair conditions impugned by the informant were as follows:
The number of floors (which initially stood at 19 and on which basis the apartment allottees had booked their respective apartments) has been increased to 29, thus resulting in the areas and facilities originally earmarked for the apartment allottees being substantially compressed and leading to delay in completion of the project.
The apartment buyers' agreement was signed several months after the booking of the apartment, by which time the allottees had already paid a substantial amount and had little option but to adhere to the dictates of DLF.
The agreement stipulated that DLF had the absolute right to reject and refuse to execute any apartment buyers' agreement without assigning any reason, cause or explanation to the allottees.
The agreement was executed with the apartment buyers and construction started without an approved building plan. No consent of the apartment allottees was required for any change or condition imposed at the time of approval of the layout plan.
The agreement did not contain the proportionate liability clause to tie commensurate penalties or damages to DLF for breach of its obligations.
After conducting an in-depth investigation into the allegations, the director general held that DLF, in exercise of its market power and dominance, had imposed unfair conditions of sale on consumers in violation of Section 4(2)(a)(i) of the act (for further details please see "Important cases before the Competition Commission").
Decision
After considering the director general's report and the submissions made by the respondents, the commission made the following rulings.
The commission held that the Competition Act applied to all existing agreements, including any that were entered into before Section 4 of the act came into force, as documents filed by the informant showed that in some cases the agreements were entered into between DLF and the allottees after the date of commencement of Section 4 of the act.
The commission considered the definition of 'relevant market' in the context of Section 4, read with Section 2(r), Section 19(5), Section 19(6) and Section 19(7) of the act. It held that, in a vast majority of cases, a small (ie, 5%) increase in the price of an apartment in Gurgaon would not make a person shift his or her preference to Ghaziabad, Bahadurgarh or Faridabad on the peripheries of Delhi, or even to Delhi. Therefore, the commission held that the 'relevant market' was the market for services of a developer or builder in respect of 'high-end' residential accommodation in Gurgaon.
The commission further considered whether DLF was dominant in this market, in the context of Section 4 read with Section 19 (4) of the act. Due to the sheer size and resources, market share and economic advantage that DLF enjoyed over its competitors, DLF was not sufficiently constrained by other players operating on the market and had a significant position of strength by virtue of which it could operate independently of competitive forces (restraints) and could also influence consumers in its favour in the relevant market.
After considering the various factors and replies from the parties concerned, the commission held that DLF Ltd had contravened Section 4(2)(a)(i) of the act by directly or indirectly imposing unfair or discriminatory condition in the sale of services, as it had:
commenced the project without approval;
increased the number of floors after commencement;
increased the floor area ratio and density per acre;
delayed completion;
possessed and forfeited payments; and
included clauses in the agreement that were heavily biased in favour of itself and against consumers.
As of August 30 2011 the commission had disposed of 10 further complaints pending against DLF. The commission found DLF guilty of abuse of its dominant position in its other Gurgaon projects and issued a cease and desist order against DLF.
Comment
The decision is the first time in India that competition law has covered the exploitative nature of abuse of a dominant position. Previously, jurisprudence on abuse of a dominant position centred mainly on exclusionary abuses (eg, predatory pricing or refusal to deal), which have the effect of excluding competitors. The decision also overlaps with the well-defined concepts of 'unfair trade practice', which have hitherto been reserved for consumer disputes, and has exposed the common industry practice of builders appropriating the funds raised from buyers for other projects.
Finally, the decision shows that the commission continues to rely on international case law when making its decisions, particularly that of the United States and the European Union. However, there remains some ambiguity in the methodology used by the commission for the computation of the penalty. Unlike in other jurisdictions, there are no well-defined guidelines for the imposition of such heavy monetary fines in India. Given the complex definition of what constitutes a 'dominant position' under Section 4 of the act, which is not only dependent on market share, builders in India must be careful when drafting flat buyer agreements.

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Metro to be Extended to YMCA Faridabad, Bahadurgarh

Metro to be Extended to YMCA Faridabad, Bahadurgarh

New Delhi Aug 09, 2011
The Centre today cleared proposals for extension of metro rail from Badarpur to YMCA in Faridabad and from Mundka to Bahadurgarh in Haryana.

The proposals were cleared at a meeting of Group of Ministers on Mass Rapid Transit System chaired by Finance Minister Pranab Mukherjee.

It was decided at the meeting that of the total cost of Rs 2,533 crore for the extension of metro rail from Badarpur to YMCA in Faridabad, 80 per cent of the amont (Rs 1,588 crore) will be borne by Haryana and Rs 544 crore by the Centre.

For the rolling stock, the expenditure of Rs 400 crore will be met by Delhi Metro Rail Corporation.Metro rail from Badarpur to YMCA, Faridabad, will cover the distance of 13.875 km and it will have nine stations. The work is expected to be completed by August 31, 2014, but efforts will be made to finish the work by March 31, 2014.

Regarding the extension of metro rail from Mundka to Bahadurgarh, it was decided that it will be put into supplementary Phase-III.

It was decided that work from Mundka to Tikri border will be completed by Delhi government (through DMRC) and for the remaining portion of about five kms from Tikri Border to Bahadurgarh, the expenditure will be borne by Haryana government.

The meeting was also attended among others by Home Minister P Chidambram, Urban Development Minister Kamal Nath, Deputy Chairman of Planning Commission Montek Singh Ahluwalia, Haryana Chief Minister Bhupinder Singh Hooda, Delhi Chief Minister Shiela Dikshit, Delhi Lt Governor Tejender Khanna, besides other concerned officers.