Goa govt in quandary over denotifying SEZs

NEW DELHI : The Centre, which has not taken any step till now to denotify the SEZs as demanded by the state, may do so only if the Goa government is able to persuade the developers to hand back the land leased to them.

The developers of the notified zones - Cipla, Raheja and Peninsula - who are already fighting a case against the state on its proposal to denotify the zones, might need to be given a good compensation package to make them part with the land.

Sources in the commerce ministry said it was not possible for the government to denotify the zones as long as the developers had the land. ���If the state can make the developers give back the leased land to them, then the Centre may not have problems in denotifying the zones.

But as long as the developers have the land, we do not have a ground for denotification,��� an official said.

Following protests against SEZs in Goa by a number of political leaders from the BJP and the ruling Congress-led coalition late last year, the state decided to scrap all SEZs in December. At that time, about 15 SEZ proposals from Goa had been filed.

While three had been legally notified, four more had received formal approval. The remaining had in-principle approvals as they were not in possession of land.

While it may not be difficult for the Centre to cancel the in-principle approvals since they do not have land, it won���t be easy to cancel the zones with formal approval as they already have land. According to sources, six of the seven SEZs with formal approval from the government (including the notified ones) have been given land on lease by the state and the lease money has been already collected for next year.

���The state not only has to return the lease money, but also compensate the developers for the investment already made,��� the official said. In case of the three notified SEZs, which are legal entities, it may be extremely difficult for the government to denotify them if the developers do not give up the leased land voluntarily, sources said.

���The state does not have too many options other than working out with the developers of the SEZs an acceptable compensation package. Developers have to be compensated for the losses suffered,��� the official said. An estimated Rs 500 crore has been invested in the notified SEZs so far.