Thursday, March 08, 2007

Govt may lift freeze on ‘all-clear’ SEZs


NEW DELHI: The government may soon end the freeze on special economic
zones (SEZs) for developers who have land in possession, have secured
formal approval for their projects and have completed all formalities
required for notification.

The empowered group of ministers (eGoM) on SEZs, which is tentatively
scheduled to meet next week, may allow such zones (about 60 in number)
to be notified. These include a textile SEZ by Sri Lankan Brandix, a
pharma SEZ by Medilabs, a footwear SEZ by Taiwanese footwear company
Lotus and an IT SEZ by Infosys.

Other SEZ proposals where the land has been acquired by developers may
also be favourably considered. There are about 173 SEZs, in addition to
the 63 SEZs which have been notified by the government, where developers
have land in their possession.

The fate of other proposed SEZs, including the ones which have received
in-principal approvals, will subsequently be decided after the eGoM
takes a call on the changes to be made in the SEZ policy based on
concerns expressed by various political parties and farmer groups.

The eGoM on SEZs had put a freeze on all approvals and notifications of
SEZs on January 22, following apprehensions expressed by many on
forcible land acquisition by states, inadequate rehabilitation package
and land misuse. The protests in Nandigram, West Bengal, where the
Indonesian Salim group was planning to set up a chemicals SEZ, had taken
a violent turn.

The uncertainty caused by the freeze resulted in complaints flowing in
from companies who had already invested in machinery and manpower after
receiving formal approvals for their proposals. A number of states
including Andhra Pradesh, Gujarat, Karnataka, Haryana and Tamil Nadu
also wrote to the PMO and eGoM chairman Pranab Mukherjee asking for an
end to the status-quo.

Speaking to ET, official sources said that the commerce department had
pointed out to the eGoM that there was no logic behind stalling
clearance of SEZ projects which were not just in possession of land but
had also cleared all formalities required for notification. These
include obtaining certificates from the state government on land
possession and non-encumbrance, getting clearance from the development
commissioner and a clearance certificate from the revenue department.

"It seems that the eGoM has finally seen our point and will take a
favourable decision in a meeting tentatively scheduled next week. We are
also making a case for all SEZs which have land in possession and have
received a formal clearance from the government," an official said.

Sources added the eGoM was waiting for the rural development ministry's
new rehabilitation package for oustees to get Cabinet clearance before
taking a decision on the changes to be brought about in the SEZ policy.
The changes being considered include placing caps on the number of SEZs
and a ceiling on the size of multi-product SEZs.


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