Business Standard reported that French carmaker,PSA Peugeot Citroen,has lost a third of the land allotted to it in Sanand.After waiting for over a year for payments,the Gujarat government recently sold around 200 acres of the 584 acres allotted.
Two state government officials said that''Since the company has failed to make even a single payment,we have sold around 200 acres reserved for Peugeot to other companies keen to buy land,''adding that the land had been sold in small parcels of 20 to 40 acres each.
State government officials said that while the carmaker still has another 300 odd acres to set up the proposed plant,the government might sell the remaining land,too,if the demand came up in future.
Peugeot had signed a state support agreement with the Gujarat government in September 2011 and was allotted land at Sanand,where it planned to set up its 165,000 vehicles a year manufacturing plant.It had announced an investment of INR 4,000 crore for the plant.
Since,the land was merely allotted and not transferred,the sale was not expected to involve any legal issues.
Official said that''After the Vibrant Gujarat Summit,demand for land is likely to rise.We can sell the remaining land if we find buyers,admitting land deals had slowed in the area.''
However,according to the Automotive Component Manufacturers Association of India,major auto component makers are reviewing their investment plans in the state as high land prices play spoilsport at a time when demand from original equipment manufacturers is down.The TATA Nano plant at Sanand is operating at around 25%capacity utilization,forcing vendors to trim their production as well as workforce.
