Policy

Adani Power’s proposal for SEZ in Jharkhand rejected

Amiti Sen New Delhi | Updated on February 08, 2018

Formal approvals for Navi Mumbai SEZ’s eight zones cancelled

Adani Power’s proposal for setting up a sector specific Special Economic Zone in Jharkhand was rejected by the Board of Approval (BoA) for SEZs on the ground that it was inconsistent with the power guidelines and not backed by a recommendation of the State.

The BoA, which met early this month, also rejected a separate proposal made by Adani Warehousing Services, a unit in Mundra SEZ, seeking permission for warehousing of imported yellow peas and red lentil for further sale in the domestic market outside the SEZ. “Both the proposals went against the letter and spirit of the SEZ rules. They were, therefore, rejected,” a government official told BusinessLine.

Navi Mumbai SEZ Pvt Ltd, promoted by Reliance Industries chief Mukesh Ambani and his associate Anand Jain, also faced disappointment with the BoA, in its last meeting on January 5, cancelling the formal approvals given to eight of its long-pending SEZs.

The BoA is headed by the Commerce Secretary and includes senior officials from other Ministries and Departments including Finance, Transport, CBEC, CBDT, Urban Development and Chemicals and Fertilisers, among others.

On Adani Power’s proposal for setting up a sector specific SEZ for power over Godda district in Jharkhand over an area of 425 hectares, the BoA observed that it did not meet the power guidelines specified for SEZs. “The fact that the proposal was not supported by a letter from the State government made the case weaker which led to the rejection of the proposal,” the official said.

On the proposal made by Adani Warehousing, the official said: “The company had sought an amendment to earlier decision on not allowing import of yellow peas, red lentils into or out of domestic area, which the BoA rejected.”

In the case of the proposal by Navi Mumbai SEZ Ltd, the BoA observed that several such extensions were given in the past with no resolution taking place on issues with the Maharashtra government. “The Board noted that ample time had been allowed to the developer and State government of Maharashtra for resolving their issues and despite than no concrete action seems to have been taken. The Board, after deliberations, decided to cancel the formal approval granted to the eight SEZs,” according to minutes of the meeting.

The government has so far given formal approval to 421 SEZ proposals of which 325 proposals have been notified and a total of 218 projects have been operationalised. There has been a slowdown in investments pouring into SEZs after the government levied Minimum Alternate Tax and Dividend Distribution Tax on the sector.

Published on February 08, 2018

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