SEZ queue gets shorter

NEW DELHI: Special economic zones (SEZs) are losing their sheen due to the uncertain global economic environment. While the government has received only two proposals for setting up SEZs this month, it has received 10 applications from investors to exit from projects already approved.

The board of approval (BoA) is likely to meet next week to consider these proposals, a commerce department official said requesting anonymity. BoA, chaired by the commerce secretary, has members from various government arms such as ministries of finance, home and defence. BoA, the authority to approve SEZ projects, was scheduled to meet on October 5 to consider these proposals, but the meeting was postponed due to unavailability of key officials.

���With uncertainty still prevailing in the global economy, investors are not feeling confident enough to get into fresh ventures,��� the official said. But that there were enough SEZ projects in the pipeline to keep investments flowing in, he added.

���Although there are some cases of formal approvals being withdrawn, there are hundreds of projects where investments are still continuing. This will keep the activity in SEZs going till things improve globally,��� he said.

As many as 335 SEZs have been notified so far (which can start functioning after getting clearances for routine activities), while 98 of them are functional. Two hundred more have got formal approvals (which means that they have got land and the permission to start construction activity). ���Even if a few developers ask for withdrawal of their formal approvals or ask for denotification, it is not going to make a big impact on the flow of investments into the zones,��� the officials said.

Despite the slowdown, investments worth Rs 37,000 crore flowed into the zones during the fiscal taking up the total incremental investments (funds invested after SEZ Rules were notified in February 2006) made in the zones to Rs 1,04,867 crore.

The two proposals for setting up zones to be taken up by the BoA includes a new submission for a plastic SEZ by Plastene Infrastructure Ltd in Gujarat and a previously deferred one for an IT/ITES SEZ by L&T Ltd in Tamil Nadu.

The request for denotification of SEZ has come from Lahari Infrastructure for its services SEZ in Andhra Pradesh. Earlier, real estate developer DLF applied for denotification of four of its projects, citing lack of demand as the cause.