Gujarat government decision holds up Rajkot SEZ

August 8th, 2008 - 6:02 pm ICT by IANS  

By P.S. Anantharaman
Ahmedabad, Aug 8 (IANS) A proposal to set up an engineering industry special economic zone (SEZ) near Rajkot city in Gujarat has got stuck because the state government has had a change of heart and decided to enforce the land use policy. This is despite the fact that the Gujarat government had signed a memorandum of understanding (MoU) on the proposal with the industry lobby, the Rajkot Engineering Association (REA), during Vibrant Gujarat 2007, a global investors’ summit held annually in the state.

The REA had proposed an engineering industry SEZ to provide a window of opportunity to the many small and medium scale enterprises (SMEs) that dot the Saurashtra landscape, an area in which Rajkot is the major town.

But the site chosen for the SEZ was in a “green zone”, meant only for agriculture, and the state government suddenly informed the REA that the land use could not be changed because the central government had sent a directive to this effect.

Maganbhai Antala, secretary of the REA, said the association had now sought about 110 hectares of land for the proposed SEZ at an alternate site at a reasonable price.

According to the REA, about 180 entrepreneurs, mostly SMEs, had shown “positive interest” to set up ventures in the SEZ.

The zone could have attracted an investment of Rs.7.5 billion ($179 million) providing employment to about 22,500 people, the REA has estimated.

To implement the project, the REA has set up a special purpose vehicle (SPV) named REA Economic Zone Private Ltd. The SPV has already been registered with the Registrar of Companies in Gujarat.

The REA has also signed a MoU with the Mumbai-based Infrastructure Leasing and Financial Services (IL&FS) for technical assistance to the project. But there has been no progress because the REA is unable to show lenders and associates that it has got land for the SEZ, Antala said.

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