SEZs land big gain, allowed to convert
TIMES NEWS NETWORK[ THURSDAY, MARCH 22, 2007 01:44:55 AM]
NEW DELHI: Recognising the problems faced by developers in acquiring
huge tracts of land for multi-product SEZs, the government has decided
to allow conversion of sector-specific SEZs, requiring less land, into
multi-product ones once the mandated quantum of land is acquired.
The move will help sector-specific zones such as Reliance's
petrochemicals SEZ in Jamnagar, Essar's steel SEZ in Hazira and Mahindra
Gesco's IT SEZ in Jaipur.
The commerce department has also laid down that SEZ developers should
make adequate provision for rehabilitation of displaced persons as per
the relief and rehabilitation policy of state governments. This move is
significant in view of the political opposition to acquisition of farm
land for industrial projects.
A notification dated March 16 amending the SEZ Rules 2006 states that if
a developer, subsequent to approval or notification of a SEZ, acquires
more contiguous and vacant land which makes the total area meet the
criteria for another class of SEZ, the board of approval (BoA) may
consider such cases on a case-to-case basis.
Other amendments made include granting exemptions on construction
material purchased by contractors appointed by a unit on behalf of the
SEZ unit (it was earlier available only to developers), extending
sub-contracting provisions to developers to enable them to use
facilities like ready-mix concrete, re-positioning of multi-services
SEZs to provide for minimum 50% processing area and including financial
details about promoters, net worth, FDI and source of FDI part of the
check-list for SEZ applications.
Speaking to ET, official sources said the amendment on conversion was
important for both notified sector-specific SEZs looking for an
opportunity to expand and the ones in the pipeline who have ambitions of
setting up multi-product SEZs but are not in possession of enough land.
The mandatory area requirement for multi-product SEZs is 1,000 hectares
while that for sector-specific SEZs the requirement is just 100
hectares. For IT SEZ, the requirement is even lower at 10 hectares.
Sources said while Mahindra Gesco is waiting for a formal approval for
converting its IT SEZ into a multi-product SEZ, both Reliance and Essar
are interested in acquiring more land and converting their
sector-specific SEZs into multi-product ones.
"It is not easy to acquire 1,000 hectares at one go. It is unfair to
keep developers waiting till they acquire all the mandated land. The
government has, therefore, decided to allow developers to go ahead with
sector-specific SEZs and later convert it to multi-product when they
have the land," the official said.
posted by Sudarshan Rodriguez at 9:55 PM
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