Surat SEZ promoter blames official for allotment mess

NEW DELHI: The developer of the Surat special economic zone (SEZ), asked by the Centre to explain alleged irregularities in the allotment and cancellation of plots to units, has said the cancellations were based on directions from the zone’s development commissioner. The directive followed failure of the SEZ units to comply with guidelines.

In a letter to the commerce department, Diamond and Gem Development Corporation — the developer and promoter of Surat SEZ — has responded to the allegations by the inquiry committee set up following a discussion on the issue in Parliament.

The developer explained that when the Surat export processing zone (EPZ) was converted into an SEZ in November 2000, there were no established rules for SEZs. A set of guidelines was put in place in January 2004 by the development commissioner in charge of Surat SEZ. In the four-year period between 2000 and 2004, the developer claimed that all efforts were made to persuade the parties to take land, apply for letters of permission (LoP) and start construction. While some did, many did not.

The developer received a direction from the development commissioner on January 8, 2004, to cancel the allotment to 68 parties that had taken land but had not even applied for LoP, the letter said. The communique added that the commissioner was asked by the developer to give parties more time and wrote to them to apply for LoP. Even after one year, when many did not apply for LoP or the ones with LoP let the permissions lapse without starting work, the allotments were cancelled.

On the issue of inadequate infrastructure in the SEZ, the developer said the units in the zone were growing impressively, which would not have happened if the infrastructure was not good.

The developer added that refunds were made to the parties whose allotments were cancelled. Some, who did not accept the cheques towards part payment of refund, could not be given the balance payment. Some parties, the developer said, had paid token amounts initially to convey their interest, but did not acquire units. These payments were not towards allotment of built-up spaces in the park.

The allottees whose plots were cancelled had alleged that the developer started cancelling the allotments without giving any show cause notice. They said they did not apply for LoP and commence construction as the developer had not provided the minimum infrastructure such as roads and water supply. The government will now examine the response and decide what action needs to be taken on the issue.