Delay In Land Acquisition Poses Hurdle For Karnataka’s EV Cluster Plans

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The Karnataka government has to compete with bordering state Tamil Nadu which offers land at a much cheaper rate

Delays in land acquisition have become a roadblock in the Karnataka government’s development plans of an electric vehicle and battery manufacturing plant near Bengaluru.

The government-owned Karnataka Industrial Area Development Board (KIADB) has notified 900 acres of land for the proposed cluster at Harohalli near Bidadi industrial area, but with landowners quoting ‘steep’ prices, the government is finding it difficult to go ahead with its plans.

Quoting KIADB officials, a report by Economic Times suggests that the process was progressing well until some landowners approached the Karnataka High Court questioning the compensation amount based on technical grounds. The court has directed the board to hold talks with landowners and arrive at a consensus.

About two years ago, the industries department came up with the idea of developing an EV cluster in about 650 acres of land to help EV and component makers to take advantage of the ecosystem at a single site. The cluster will provide logistics and support for entrepreneurs in the EV sector, the industry department officials had then said.

Industries minister Jagadish Shettar told the publication that the government was making efforts to complete the land acquisition soon, and was simultaneously tapping investors to set up their units here. The government has been in talks with some EV firms to get them to the proposed cluster, he added.

The issues related to compensation, he said, will be sorted out soon. “Landowners have agreed to part with the land. But we have to agree on a price,” he said.

Industry officials are cautiously approaching the project as the government cannot afford a manufacturing estate where plot prices are uncompetitive for EV investors, the report added.

The Karnataka government, the first state to introduce the EV policy, was also simultaneously in talks with some top EV manufacturers including Tesla to have their production facilities here. While the industries department is tight-lipped about any major EV makers showing interest to set up units around Bengaluru, the delay in the land acquisition for the cluster may also be hampering the talks.

The Karnataka government also has to compete with bordering state Tamil Nadu, where multiple EV companies has set up plant including the world-biggest electric scooter factory, which offers land at a much cheaper rate.

The report added that the government’s efforts to develop EV clusters in tier cities like Dharwad has not received a positive response from EV investors as they prefer land close to Bengaluru over faraway places in Karnataka.

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