States, foreign investors want SEZ policy out of cold storage

TIMES NEWS NETWORK[ FRIDAY, MARCH 02, 2007 02:36:36 AM]

Pressure is building on the central government from both foreign
investors and state governments for an early decision on the future of
the SEZ policy.

While Taiwanese footwear company Lotus Footwear Enterprises is the
latest to join the bandwagon of foreign investors expressing concern
over the current freeze on approvals and notifications, chief ministers
of Tamil Nadu, Karnataka , Andhra Pradesh, Haryana and Gujarat have
written to the Prime Minister's Office (PMO) and the commerce
department, pointing out that a further delay in a decision on SEZs
would result in flight of proposed investments from India to other
countries.

Taiwan-based Feng Tay Enterprises, whose group company Lotus Footwear
Enterprises received a formal clearance for setting up a 275-acre
footwear SEZ in Tamil Nadu's Thiruvannamalai District, has written to
the commerce department pointing out that there was an urgent need for
the SEZ to be notified so that production could start as they were under
contractual obligation with worldwide buyers.

The company has plans of investing over Rs 300 crore and generating
employment for 2,000 people. Since it is already in possession of land,
it has ordered machinery. Officials in the commerce department said that
the machinery would be diverted to Philippines and Vietnam, if the
freeze on notifications is not removed soon.

Foreign investors who have made similar complaints include Sri Lankan
textile company Brandix that has land for a textile SEZ in AP and the
Singaporean government on behalf of its real estate company Ascendas
which has formal approval for setting up an SEZ in Tamil Nadu.
Speaking to ET, official sources said that it was becoming difficult to
convince foreign investors to hold on as they were losing patience with
every passing day. "If the freeze on approvals and notifications is not
removed soon, investments will flow away. The machinery that has been
ordered by some companies will be diverted to their units in other
countries," an official said.

State governments, too, are getting apprehensive about losing promised
investments. The chief ministers of Tamil Nadu, Karnataka, Andhra
Pradesh, Haryana and Gujarat have written as much to the Centre asking
the government to allow the SEZs in possession of land to start operations.

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