Land procurement hold ups, contiguity, meltdown led to SEZ failures | chandigarh | Hindustan Times
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Land procurement hold ups, contiguity, meltdown led to SEZ failures

chandigarh Updated: Jan 18, 2012 23:36 IST
Hitender Rao
Hitender Rao
Hindustan Times
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Hold ups in procurement of land, economic slowdown and frequent changes in business plans have eventually sounded the death knell for the ambitious 12,500 acre x 2 proposed special economic zones of Reliance Haryana SEZ Ltd (RHSL), a joint venture of Mukesh Ambani’s Reliance Ventures Ltd and Haryana State Industrial and Infrastructure Development Corporation (HSIIDC).

While Reliance was able to buy about 7,000 acres from Jhajjar farmers through direct negotiations, the land was in patches and lacked contiguity. In Gurgaon, it got 1383 acres on a platter from the state government but were remotely successful in buying another 1300 acres on its own. In fact, the land procured in Gurgaon was also in bit and pieces having no contiguity and was located far off from the 1383 acre of HSIIDC land. It would not be wrong to say that sheer size of the proposed project probably became difficult to implement.

The company in several communications to Haryana also wrote that it was feeling a serious impact of economic environment while executing the proposed SEZ project. “Even though exports were showing recovery no fresh capacities were being created as a result of which SEZ flavour though attractive was not sufficient to invite large investments,’’ said a March 26, 2010 Reliance communiqué to Haryana.

Jhajjar SEZ shelved first

Hindustan Times was the first to report on July 15, 2010 that the Reliance’s request for a change in the concept of the project following its failure to aggregate sufficient land in Gurgaon and Jhajjar and due to the impact of meltdown was approved by Haryana Investment Promotion Board (HIPB) headed by chief minister, Bhupinder Singh Hooda.

Consequently RHSL was given a go ahead to shelve the SEZ framework in Jhajjar and instead set up a model economic township (MET). The MET project is to be implemented by a new company (METCo) in which Reliance and IL&FS will have a share holding of 45 % each and HSIIDC will have 10 % sweat equity.

It was also decided by the HIPB in 2010 that RHSL will set up a multi sector specific SEZ on 1501 acre in Gurgaon in place of previously proposed multi-services SEZ on 1086 acres. The 1501 acres also included the 1383 acre transferred by HSIIDC to RHSL in 2006.

Gurgaon makes an exit

Haryana’s decision on Tuesday to ask Reliance to hand back the 1383 acre Gurgaon land as it had failed to implement the project in 5 years has conclusively put the curtains on the SEZ project. It also means that Mukesh Ambani’s lofty claims of this project catalyzing an investment of more than Rs one lakh crore and generating direct and indirect employment for more than 400,000 people have also got grounded.

Situation on ground

RHSL has in its possession about 9000 acres in Gurgaon and Jhajjar districts. It has also invested about Rs 4100 crore in the project. For Jhajjar, it has signed a shareholders agreement with M/s Infrastructure Leasing and Financial Services Limited (IL&FS) and roped in two Japanese multinational companies-Panasonic and Mitsui.

While Mitsui plans to set up a multi modal logistic hub, Panasonic has plans to set up a techno park for consumer goods. In Jhajjar’s Dadri Toi, 74 acres has been allotted to Panasonic for setting up the project.