Citizens’ Research Collective on SEZ

Gurgaon, January 16, 2008: The commerce and industry minister, Mr Kamal Nath, today ruled out any rethinking on the SEZ Act, stating that it was an act of Parliament and had been very successful in generating employment and investment. With much debate generated over the SEZ Act following the Goa imbroglio, several quarters were contemplating whether an amendment would be brought in to allow denotification of SEZs.

On the Goa issue, Mr Kamal Nath said the state chief minister, Mr Digambar Kamat, had written to the Centre asking for withdrawal of SEZs sanctioned for the state. “We are studying the matter,” the minister said on the sidelines of the ongoing Partnership Summit, organised here by the CII. “I have said so in the past that the government is not thrusting SEZs on any state.” He contended that it was for the states to take a decision on the kind of developmental model that they would like to have.

Meanwhile, one option before the commerce ministry is to place the petition before the Board of Approvals (BoA) for SEZs, which is scheduled to meet in February for a final decision, a senior ministry official said. However, it was up to the Goa government to compensate the developers for the investment made in the SEZs, along with interest. The state government could make the payment and avoid any litigation, he added.

A piquant situation had cropped up in Goa where, on New Year’s eve, the state government’s Cabinet Committee on Infrastructure decided to withdraw its recommendations on 15 SEZ projects. Of these three had been notified while four had been formally approved and eight were pending. The move was prompted by protests by some groups in Goa that promised to turn violent, particularly with New Year celebrations round the corner.

While the commerce secretary, Mr Gopal K Pillai, who also chairs the Board of Approval (BoA) for SEZs, an inter-ministerial group constituted under the Act, contended that the three notified SEZs were legal entities and thus could not be cancelled. The others, including the four formally approved ones, could be taken up, he stated on 2 January.

However, after the Goa CM met him on 3 January, Mr Kamal Nath declared “there are provisions in the SEZ Act for review of the notified SEZs”.

The three notified SEZs that will be affected are: Meditab Specialties, promoted by Cipla on a site of 123.2 acres and notified on 10 April 2007; Peninsula Pharma Research Centre on 20.365 acres in Mormugoa, notified on 10 July 2007, and IT/ITES SEZ: promoted by K Raheja Corporation on a site of 105.91 acres in Verma Industrial Area Goa notified on 6 November 2007.

With the Goa government stating paucity of water and electricity as the cause for the cancellation call, the commerce ministry was quick to point out that the state government should have considered these before recommending the SEZs. The land had been acquired by the state and already allocated to the developers.

Source: Statesman News Service