Singur effect: WBIDC to face auditor test
Since land is being given back to farmers, the industry promotion body can’t show it as an asset any longer.
While all eyes were on Singur on Wednesday when chief minister Mamata Banerjee began handing over the land record documents to the original owners, the authorities of the West Bengal Industrial Development Corporation (WBIDC) were a tad uncomfortable and apprehended tough questions from the auditors.
The reason: auditors might point out that the expenditure of more than Rs 170 crore that WBIDC incurred for acquiring more than 997 acres land for the small car project, developing it and protecting it in legal battles in the Supreme Court and High Court, has now to be treated as a loss in the books.
All these years, it was shown as an “asset”, which will be impossible from this year as the “asset” is going back to the original owners of the land.
“We are aware of the issue but I am not authorised to make any comment on it,” P Kamalakanth, executive director of WBIDC, told HT on Tuesday.
Sources in the corporation told HT, WBIDC has spent Rs 120 crore as compensation to the farmers who have given their land for the project, Rs 30 crore for setting up of drainage and canal system inside the site and Rs 12 crore for fencing surrounding it.
The agency has also spent around Rs 15 crore for legal battles and additional compensation to an industrial unit at the project site.
“The entire money had been spent by the corporation till 2008 when the Tatas shifted its Nano car project to Gujarat leaving Bengal. In the WBIDC balance sheet the expenditure on the 997 acres of land was shown as a fixed asset. But now we don’t know what will be shown in the balance sheet at a time when there will be no ‘asset’ after the owners get back their land following the Supreme Court’s directive,” a senior official of the corporation said, requesting anonymity.
“We don’t think that the government will pay the expenditure to WBIDC as compensation after the process of handing over the land is over. I think WBIDC may face trouble since it raises loans from market for industrial promotions in the state particularly when its balance sheet will show virtually ‘zero’ asset in the backdrop against its money spent for the small car project in Singur,” a former WBIDC official involved with the compensation package for willing farmers for Nano factory during the regime of the Left Front government.
A compensation of Rs 4.50 crore was also paid to a factory that was inside the plot.