Citizens’ Research Collective on SEZ

Kolkata, December 8, 2007: The Union commerce ministry has expedited the process of creating a corporate governance structure for upcoming special economic zones (SEZs) in the country. It plans to set up a governing committee for SEZs in each state comprising of SEZ developers, representatives from the state government and the units functioning at an SEZ.

The committee will also have representatives from among the employees. The process has been hastened after the commerce ministry received complaints from some states regarding the functioning of SEZ developers.

“A number of stakeholders are involved in the process. We are taking the views of existing SEZ developers in Gujarat and Maharashtra before framing the corporate governance structure. We have to create a prototype on the governance structure before advising state governments,” commerce ministry officials told ET.

Incidentally, the parliamentary standing committee on SEZs chaired by Murli Manohar Joshi had also expressed apprehensions that in absence of a representative governing committee, infrastructure and other needs of SEZs may not be adequately addressed. The urban development ministry, too, has voiced the need to come up with guidelines on governance structures for SEZ townships.

“A string of investments and a whole lot of employment is involved in the SEZs. Therefore, we cannot take a chance,” the officials added. At present, the number of valid SEZ approvals is 232 and notified SEZs is 172. Once all these SEZs become functional, 4 million additional jobs will be created. The commerce ministry is expecting an investment of Rs 3,00,000 crore in these SEZs. This figure will rise further when the 165 in-principle approvals get formal approval status.

When contacted, senior officials at the West Bengal state commerce and industry department said: “There have been talks of a governance structure for SEZs for quite some time now. SEZ is a new thing for all states and a guideline to run them in a proper fashion is an important issue. However, at the state-level, we already have an SEZ screening committee.”

While commerce ministry officials are busy framing the governance structure for SEZs, the board of approvals (BoA) meeting slated on December 12 to clear 36 SEZs has been deferred to January 2, 2008. “This a routine deferment and nothing unusual,” the officials added.

Source: The Economic Times