The Hindu Business Line : BoA likely to cancel fresh SEZ proposals from Goa

The Commerce Ministry has the weight of the Law Ministry in this regard which also concurred with the view that compensation should be paid to the developer before the annulment of the SEZ is sought by the State.

G. Srinivasan

New Delhi, June 3 The Board of Approval (BoA) for Special Economic Zones (SEZ) at its meeting to be held here on Wednesday is likely to annul a clutch of 13 fresh proposals for in-principle approval and might also issue show cause notice to the three formally approved SEZs in Goa in 2007-08 for cancellation in deference to the plea of the State Government of Goa.

This might come as a respite to the State government of Goa reeling under protests against SEZs in the State. A division bench of the Bombay High Court directed the Goa Government on June 2 in Panaji to take a decision within two weeks over its ‘stop work’ orders issued earlier to three private promoters whose SEZs have been notified by the Central Government.

Highly-placed sources in the Government told Business Line here that since the decision of the Ministry of Commerce not to denotify the already notified 3 SEZs in Goa has been duly communicated, the onus is on the State Government to come to an amicable settlement with the three notified SEZ developers.

The sources said that the Central Government would not pay any compensation to the developers and it is up to the State Government to engage with the developer for coming to a just settlement and once both the parties decide not to go ahead, the Central Government would have no problem in denotifying the SEZs.

The sources said since it was the State Government which recommended all the pending 13 SEZs to the BoA for its in-principle clearance and it is the same State Government which subsequently sought their cancellation, the BoA after considering the State’s request would duly cancel all the proposals and might issue show-cause notification as to the three SEZs which have been formally approved but not yet notified.

The sources point out that only those eligible proposals which are duly recommended by the State Government concerned are considered by the BoA and once the two stages of clearance beginning from in-principle to formal approvals were over and the SEZs are notified, the SEZs so functional and notified could not be revoked without due recompense to the developer and the units attached to it.

Compensation

The Commerce Ministry has the weight of the Law Ministry in this regard which also concurred with the view that due compensation should be paid to the developer before the annulment of the SEZ is sought by the State. After such an ‘amicable settlement’ by both the parties, the Centre has no reservation in annulling the notified SEZs as without such a course, the very concept of these export enclaves would lose their credibility and confidence of investors.

The Confederation of 100 per cent Export-Oriented Units and SEZ, Director-General, Mr L.B. Singal, said that the new SEZs that were functioning after the SEZ Act and Rules came into force had promoted exports, employment and investment on a higher gear.

He said that there has been a 94 per cent increase in exports from SEZs during 2007-08 at Rs 66,000 crore, against Rs 34,615 crore in 2006-07, while the new SEZs that came in the aftermath of the SEZ Act have generated over two lakh direct employment with new investments of Rs 73,000 crore funnelled into these zones.

Meanwhile, sources said that at Wednesday’s meeting as many as 11 fresh proposals, mostly in IT/ITES SEZs from Andhra Pradesh, Uttar Pradesh, Karnataka, Gujarat and Maharashtra and four conversion proposals from in-principle to formal approval in Maharasthra would figure for approval.

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