Wednesday, February 07, 2007

Singapore questions SEZ freeze



NEW DELHI: The Singapore government has demanded an explanation from the
Indian government for the current freeze on SEZ approvals and
notifications. Singapore-based realty major Ascendas has $1 bn of
investments lined up for its two proposed multi-product SEZs in Tamil
Nadu, which have now been put on hold.

In a letter to the Prime Minister’s Office (PMO) and the ministry of
external affairs, the Singapore High Commission has expressed its
unhappiness about the uncertainty surrounding the future of SEZs in the

Concern over the SEZ stalemate has also been expressed by Robert Soros,
deputy chairman, Soros Fund Management, who is currently in India
scouting for opportunities to invest in multi-product SEZs. In a recent
meeting with commerce ministry officials, Mr Soros made enquiries about
the empowered group of ministers (eGoM) on SEZs presiding over the
future of the SEZ policy and the time by which the policy was expected
to stabilise.

The eGoM, in its last meeting on January 22, had put a freeze on SEZ
approvals and notifications following protests from political parties
and farmer groups over forcible land acquisition by states. Even SEZs
which had acquired land and had received formal approvals from the
Centre were put on hold.

The fact that the government has not come up with fresh dates for the
next meeting of the eGoM has made matters worse. Developers of as many
as 174 formally approved SEZs, some of whom have already bought
machinery and hired labour, now do not know what the future holds for them.

Speaking to ET, official sources said that Singapore is, especially,
disappointed over the freeze as senior officials from India had
personally met Singapore officials to persuade them to invest in Indian
SEZs. “The Singapore High Commission pointed out that after going to
such lengths to woo investments from the country, the Indian government
should not have allowed such uncertainty to seep in,” an official said.

If the eGoM doesn’t settle the issue soon, future investments from
foreign players may also dry up. While Mr Soros was assured that the
current freeze on SEZs was temporary and things would normalise soon,
his interests may get transferred to other destinations like Vietnam and
the Philippines if the policy was not sorted out in the near future, the
official added. Mr Soros is now touring India looking for a suitable
place to set up his proposed multi-product SEZ.


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