After nearly two years of relative calm, fresh tension appears to be brewing
over the West Bengal government's plans to set up a petroleum, chemical and
petrochemical investment region spanning Nayachar Island and the adjoining
mainland comprising Haldia and Nandigram.

This is because Nayachar is only 50 square kilometres (sq km) in size and
the PCPIR will cover 250 sq km, including the 61 sq km now under existing
chemical and related units in Haldia.

As a result, locals there -- more so in the area broadly called Nandigram
lying across the minor Haldi River from Haldia -- fear a fresh round of land
acquisition, as the state government pushes ahead with its PCPIR plans with
Indian Oil Corporation [Get
Quote<http://money.rediff.com/money/jsp/quote_process.jsp?query=indian
oil
corporation ltd>] and Calc Refinery Ltd as its anchor tenants. The PCPIR is
one of the Left Front government's showcase projects in its efforts to
accelerate growth in the state.

The combating sides, the ruling CPI (M)-backed local committees and the
Trinamool Congress-backed Nandigram groups, appear to be lining their
supporters for the next round of the PCPIR battle.

Protests over alleged forced land acquisitions in 2006 and 2007, which
spilled over into violence and 14 local deaths, forced the state government
to relocate the PCPIR to the largely uninhabited island of Nayachar, where
the few migrant families were considered CPI (M) supporters. But it has been
silent on the remaining land that still has to be acquired on the mainland.

Nandigram, once a CPI (M) stronghold, became Trinamool country after the
land acquisition protests. Since this traumatic event, the CPI (M) and the
Left lost all elections in the area.

Meanwhile, the prospect of compensation has caused a population explosion of
sorts on Nayachar.

"The number of people on the island has gone up from a few dozen families of
temporary fish farm operators to nearly 4,000, with migrants claiming to be
from South 24-Paraganas or Nandigram in East Midnapore," confirmed a senior
police officer from Kolkata.

A source in the office of a senior local Left Front leader said, "People are
flocking to Nayachar, hoping that they will get some compensation when
industries come up in the area."

The police source indicated that a coastal police outpost may be set up in
Nayachar. Any move to start civil work there could precipitate conflict,
warned the police officer, adding that the state cabinet and local
leadership from all parties had been alerted on the issue. The CPI (M)
source said work would begin only after the Lok Sabha polls.

Meanwhile, Trinamool Congress leader Mamata Banerjee -- whose protests over
compensation prompted Tata Motors [Get
Quote<http://money.rediff.com/money/jsp/quote_process.jsp?query=tata
motors ltd>
] to pull its Nano project out of the state last year -- said her party
would resist even that part of the PCPIR located on Nayachar.

The PCPIR project will be executed by a special purpose vehicle called the
Prafulla Chandra Roy Chemical Complex, set up as a joint venture between the
West Bengal Industrial Development Corporation with a 49 per cent stake and
the New Kolkata International Development with a 51 per cent share.

NKID is a consortium between Unitech Ltd [Get
Quote<http://money.rediff.com/money/jsp/quote_process.jsp?query=unitech
ltd>
] (with 40 per cent), Salim Group of Indonesia (40 per cent) and Universal
Success of Indonesia (20 per cent), with Jurong Consultants of Singapore
providing the expertise.

The possible political conflict is only one of the problems facing the
PCPIR. Its economic viability was already under question, as the entire
island has to be raised by at least three metres to protect it from tidal
surges of the Bay of Bengal which can go up to three metres above sea level.

The island also had to be connected to the mainland by a 4-km bridge with
clearance of at least 50 metres, because of the shipping lanes passing by
it.

In addition, the PCPIR on Nayachar violated existing environmental laws
under the Coastal Regulation Zone Notification of 1991.

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