Reliance’s dream of Mumbai Next clipped
The Centre’s move to cap the maximum size of SEZs to 5,000 hectares and increase the proportion of processing area from 35 per cent to 50 per cent, reports Lalatendu Mishra.business Updated: Apr 07, 2007 04:23 IST
The Centre’s move to cap the maximum size of special economic zones (SEZs) to 5,000 hectares and increase the proportion of processing area from 35 per cent to 50 per cent, according to analysts, has clipped the dreams of Mukesh Ambani’s Reliance Industries, which is developing the Maha Mumbai SEZ in neighbouring Raigad district.
Originally planned over 10,000 hectares of land, Reliance had lined up over Rs 30,000 crore for Maha Mumbai, a model township near Mumbai that could have taken care of the future expansion of the metropolis. Now that the area will be halved and 15 per cent land originally earmarked for real estate development will be allocated for the processing area, only 18 per cent of the 5,000 hectare Maha Mumbai SEZ will be available for real estate development, making the project unviable.
According to other guidelines, every SEZ needs to earmark 7 per cent of its area as a green belt, 20 per cent towards basic infrastructure and 5 per cent as an institutional area, putting the reserved area at 32 per cent.
Reliance Industries executives refused to comment saying they were yet to get a copy of the revised norms. But industry sources who refused to be named said the government might change its policy later, thereby putting the project back on track.
According to government officials who refused to be named, the commerce ministry is mooting the idea of not allowing two contiguous SEZs by any single developer. If that happens, Reliance Industries’ plans to develop the Navi Mumbai and the Maha Mumbai SEZs as an integrated multi-product zone could be jeopardised.
The Navi Mumbai SEZ will be set up over 4,000 hectares area and is adjacent to the 10,000 hectare Maha Mumbai SEZ. Apart from its own investment, Reliance Industries had estimated investments of Rs 3,00,000 crore from industries setting up shop in the zone.
The Centre’s decision to keep state governments away from land acquisition complicates matters further. Although Reliance Industries has purchased over 1,000 hectares of land from farmers for the Maha Mumbai SEZs, it was banking on acquisition by the Maharashtra government to feed its land requirement.