Due to policy change, IT units in Vizag SEZ still on a sticky wicket

Ch RS Sarma Visakhapatnam | Updated on December 29, 2014 Published on December 29, 2014

Conversion of land allotted to IT firms into SEZs has thrown open a Pandora’s Box

In accordance with the Andhra Pradesh Government’s plans to develop Visakhapatnam as an IT destination an incubation centre was launched in one of the special economic zones atop Rushikonda Hill. The Chief Minister will lay the foundation stone for the IT signature tower next month.

However, some units in the IT SEZs atop Rushikonda are struggling. These units are dissatisfied with the arrangement. Initially, the units were sold lands on the Rushikonda Hills, but subsequently these lands were converted into SEZs and the owners of these units were asked to sign a lease deed with the Andhra Pradesh Industrial Infrastructure Corporation Limited (APIIC). This created several problems. The IT companies, which built offices on the Rushikonda Hills could not get loans from the banks and they also could not sub-lease the facility to other IT companies. These companies then sought a co-developer status along with the APIIC, failing which they wanted the Centre to denotifiy the SEZs.

Inadequate measures

However, the move to de-notify Rushikonda SEZs did not bear fruit despite the State Government’s recommendation to the Centre to that effect. To provide some relief to the units, the State has issued a GO authorising the units to sub-lease the facilities they have built, if they have provided the required number of jobs for the land they have taken and fulfilled other obligations.

The issue has not been resolved yet and some of the units like Sankhya Technologies have not even been issued a licence to operate.

“It has proved to be a very tricky issue and we have pleaded with the authorities to resolve it for long. We followed their instructions to the tee. Initially, we were given the land on an outright sale basis. Subsequently, it was converted into a SEZ. Now we are in a fix. The Government has to bail us out of it as we are not responsible,” says Bulusu Gopi, of the Sankhya Technologies.

He mentioned that the APIIC officials had assured them that it would be resolved soon. “We are hoping for the best,” he added.

Many believe that de-notification of the SEZs is the only way out, but that is also fraught with problems, as the units would then have to refund the incentives they received from the Government.

Published on December 29, 2014
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