Dinesh Kamath's news 'Is NMSEZ project a big flop?' that was published in Newsband

Is NMSEZ project a big flop?

By Dinesh Kamath

NAVI MUMBAI: Between the years 2000 and 2004, City and Industrial Development Corporation had come up with the idea of forming a Special Economic Zone within Navi Mumbai. This was called Navi Mumbai SEZ.

Navi Mumbai SEZ Private Limited had been appointed as the Special Planning Authority (SPA) under the Maharashtra Regional & Town Planning Act, 1966, for the notified areas in Dronagiri, Kalamboli, Ulwe (Airport) and Ulwe (Waterfront) Nodes of Navi Mumbai.

As a Special Planning Authority, NMSEZ had the roles and responsibilities to (i) Formulate Development Control Regulations and Norms; (ii) Control and monitor development / Implementation and enforcement of the Master Plan; (iii) Grant / refuse development permission at plot-level and revocation / modification etc.; (iv) Grant / refuse Occupancy Certificate for constructed premises; and (v) such other roles and responsibilities as enumerated in the Maharashtra Regional and Town Planning Act, 1966.

It was CIDCO MD Lakhina and General Manager Suhas Thakar who had hit upon this idea of forming SEZ and CIDCO’s stake was around 26%.

Tenders regarding this scheme were called in 2002/03 and letter of indent was issued in February 2004. It was decided that 1900 hectares of land would be given for constructing of SEZ. However, ultimately 1842 hectare of plot was granted. Agencies like Videocon representing the company Sea King, Nikhil Gandhi representing SKIL, Hiranandani representing Hiranandani Constructions and Avinash Bhosale representing Avinash Bhosale Infra Pvt. Ltd joined.

The aims of the zones included: increased trade, increased investment, job creation and effective administration. To encourage businesses to set up in the zone, financially libertarian policies are introduced. It was motivated by the desire to attract foreign direct investment (FDI). The benefits a company gains by being in a Special Economic Zone may mean it can produce and trade goods at a globally competitive price thereby generating greater economic activity and employment through their establishment.

The objectives of SEZs can be explained as: Generation of additional economic activity; Promotion of exports of goods and services; Promotion of investment from domestic and foreign sources; Creation of employment opportunities; Development of infrastructure facilities.

At this stage Videocon International which was the lead member in this project quit from pursuing this project and now the lead member was SKIL of Nikhil Gandhi and after joining hands with CIDCO at 26% stake, a new company called Dronagiri Infra (P) Ltd was formed. This new company was owned by RIL Chairman Mukesh Ambani, Anand Jain of Jain Corps and CIDCO.

At the time of formation of the Company, Reliance joined the team and the share of SKIL, Hiranandani Constructions and Avinash Bhosale Infra Pvt. Ltd was reduced to nominal and Reliance became the main shareholder of the company.

The main thing is the cost of each Hectare of Industrial Land cost Rs 63.74 lacs and CIDCO had parted with 1842 hectares of land. So the total cost of plot granted for constructing SEZ was Rs 1174 crores. This amount was paid to CIDCO.

CIDCO allotted land for formation of SEZ in Navi Mumbai as follows: In Kalamboli, 350 hectares of land was allotted, 1250 hectares of land at Dronagiri, 242 hectares of land at Ulwe. All these lands were acquired by making the residents of these regions to vacate and part with their lands and they were promised a big package of job and business opportunity.

Extension of SEZ is under consideration by UDD and CIDCO Director and MD and Chief Planner is also involved in a big way in this ambitious project.

As per rule, if a plot is granted by CIDCO to a company for a particular project, and if the project is not completed within four years, CIDCO has the right to collect a huge fine as penalty from this company. Also CIDCO has the right to take back the allotted land if the project is not completed within six years. The decision to pursue the SEZ project was made in 2004 and accordingly a huge quantity of land was allotted to the companies who were assigned to pursue this project but even after 11 years have elapsed, the project has not yet started and CIDCO is sitting quiet and is not caring to take any kind of action against the defaulting companies. The losers in this game are none other than those who parted with their lands and to whom CIDCO made big promises. For example, a huge expanse of land in JNPT area is remaining barren for years and no constructive work has begun over there.

Hundreds of farmers in Maharashtra's Raigad district are demanding that their land, which was acquired for a special economic zone (SEZ) project that may now have to be shelved, be returned to them. So the farmers plan to file a petition asking for their land to be returned. Many farmers who have sold their land have joined the petition already

What is CIDCO doing about this?