The Bengal cabinet on Thursday approved a proposal to grant freehold rights to 4,102 acres of land to JSW, to which the plot had been leased out by the Left Front government at Salboni in West Midnapore, with a rider that the firm would have to set up an industrial park on 1,989 acres.

The development comes in the backdrop of the announcement made by former Team India captain Sourav Ganguly, who was with chief minister Mamata Banerjee during her visit to Spain, that he would set up a steel factory in West Midnapore with an investment of Rs 2,500 crore.

“The state cabinet today (Thursday) approved a proposal moved by the JSW to make 4,102 acres of land freehold in its favour…. The company has to use 1,981 acres for industrial use and 1,989 acres to set up an industrial park. The company can use 132 acres for commercial purposes. The company has to pay a sum of Rs 244 crore to get the freehold rights to the leased land,” said a minister who was present at the cabinet meeting that was held in the chief minister’s Kalighat residence.

Senior officials at Nabanna said since the JSW had to set up an industrial park on the land possessed by it, the government was likely to transfer to Sourav the land required to set up his steel unit. Sourav will have to set up the unit at the industrial park and not on commercial land.

Sources said since the JSW was using only 850-900 acres of the total land leased out to it, the company had proposed to return nearly 3,000 acres to the government. The company had demanded that the government return the salami of Rs 70 crore it had paid while the land had been leased out to the company.

But the government could not take back the land as there was no provision to return the salami once accepted. So, initiatives were taken to use the unused land of JSW since the government received a proposal from Sourav to set up a steel factory.

“A policy was framed under which leased out industrial land could be given freehold rights against the payment of 15 per cent of the current market price of the land. Now, under this policy, land for the proposed steel unit of Sourav has been arranged,” said a bureaucrat.

The sources said the plan to arrange land for Sourav’s steel factory had been finalised before the visit to Spain. “As everything had been finalised by then, Sourav made the announcement in Spain,” said a senior official.