In December 1987, Benoy Choudhury, then the West Bengali minister of land and land reforms, gave the island to the state's fisheries department for redevelopment. In 2000, the government set up 13 fishing cooperatives on the island, providing assistance by digging 315 ponds for farming of tiger prawns. In 2007, the government cancelled the contracts for the cooperatives, as they had not been profitable. This left the farmers working illegally.[2]
In 2006, it was proposed that a large special economic zone called a chemical hub would be set up in Nandigram, West Bengal.[3] The proposal led to protests in the region, which erupted into the Nandigram violence in 2007; the project was shelved in March 2007 as a result.[4] On 3 September 2007, chief minister Buddhadeb Bhattacharjee stated that the government proposed to relocate the project to Nayachar, which was state-owned and technically uninhabited.[5] As a result, the project would neither entail land acquisition nor require significant population displacement.[6]
The chemical hub would have been a joint venture between West Bengal Industrial Development Corporation (WBIDC) and New Kolkata International Development, a group comprising three companies including the Salim Group of Indonesia.[7] Indian Oil Corporation would have been an anchor investor.[8]
The project encountered difficulties. Nayachar comes under the Coastal Regulation Zone where industries are not permitted for environmental reasons.[9] A bridge would have been required to link the island to Haldia.[10]
The state fisheries department had sought the opinion of the Geological Survey of India regarding the island. GSI had said that the soft land of the island was vulnerable to earthquakes, cyclones and tsunamis, although it had not completed a site-specific survey, and geological data in the area had last been updated in 1985.[11][12] Additionally, the fisheries department demanded Rs 220 million from the WBIDC for cancelling its work on Nayachar, to repay a loan it had taken from the Government of India for the purpose.[7]
State Industries Minister Nirupam Sen stated that "The technology to consolidate the soil on such islands is available. They have done it on an island in Singapore," referring to the Salim Group's work on Jurong Island in Singapore.[13][10] On September 14 2007, it was reported that Geological Survey of India would take at least six months to complete a detailed geological study in Nayachar after the Government of West Bengal approved a geo-technical survey.[12]
In 2011, the project was officially scrapped.[14]
