Government May Cancel SEZs of Hindalco, Essar, Adani

Government is likely to cancel the approvals granted by it to nine companies including Hindalco Industries, Essar and Adani for setting up of special economic zones as no work has been done to execute the projects.

The Development Commissioners have recommended to the Board of Approval to cancel these SEZ projects. The formal approval had been granted to these projects by BoA.

"However, since there is no significant progress made by the developer/co-developer, the concerned DC has proposed for cancellation of formal approval granted to the developer," the agenda of the BoA meeting said. The meeting is scheduled for September 18.

Hindalco Industries has proposed to set up an aluminium product SEZ in Orissa.

The formal approval to the developer was granted in July 2007. The developer was granted extension from time to time and the last extension granted has expired on December 31, 2013, according to BoA.

"The developer did not make any request for extension. DC FSEZ had taken up the matter with the developer, the last reminder was sent on 13.08.2014 giving 10 days time.

"Since no communication has been received, DC has recommended for cancellation of formal approval of 115 hectare and in-principle approval for 740 hectare," it said.

Essar Jamnagar SEZ Ltd had proposed to set up a multi-product zone in Gujarat. The formal approval was expired in August 2009.

The developer did not make any request for extension, it said, adding that the DC had taken up the matter with the developer but no communication has been received.

Similarly, Adani Townships & Real Estate Company Ltd had proposed an IT/ITeS zone in Gujarat.

"The formal approval expired on 11.06.2010. The developer ...has reported that they could not proceed with the SEZ project due to adverse demand scenario from IT sector.

"Accordingly they are not interested in perusing the project. DC has recommended that the formal approval may be withdrawn," it added.

The other developers whose SEZs may be cancelled include Chennai Business Park, Integrated Warehousing Kandla Project Development and Gujarat Industrial Development Corporation.

As per the SEZ Rules, formal approval is valid for a period of three years by which time at least one unit has to commence production and the zone becomes operational from the date of commencement of such production.

Provision to this rule provides for extension of this formal approval by BoA, for which the developer will submit his application to the concerned DC, who shall, within 15 days forward it to the Board with his recommendations.