Reliance likely to break up Jhajjar SEZ into 5 chunks

GURGAON: Trust Reliance Industries (RIL) to roll with the punches. It has already started discussions with the Haryana government over modifications to the plans for its giant SEZ at Jhajjar, originally proposed to sprawl over 25,000 acres. The need for modification has been necessitated by the revision of SEZ norms by the empowered group of ministers (eGoM). RIL is considering breaking up the giant SEZ into five separate zones: one large multi-product SEZ and four smaller ones.

According to sources in the Haryana government, RIL has proposed it will go ahead with land acquisition in the area. However, further acquisition will only be aimed at generating contiguity in the 10,000-odd acres the company has acquired. Sources say contiguity in the project could be ensured by the acquisition of nearly 5,000 acres more. Then, the company may use 12,500 acres for one multi-product SEZ, and spin off its proposed container facility, food processing unit, power plant and airport into separate projects.

When contacted, an RIL spokesperson declined to comment. Haryana State Infrastructure & Industrial Development Corporation (HSIIDC) officials, however, confirmed that efforts to find an alternative have been initiated by both the parties. “Something has to be done. We have made headway and there is general excitement in the state, with expectations of major economic activities and subsequent creation of employment opportunities. We will definitely go ahead with the project, obviously adhering to the proposed policy regulations,” a Haryana government spokesperson told ET.

It is, however, not clear if RIL will apply for SEZ status and concomitant tax exemptions for the airport project. As of now, food processing units, 1,000 mw-plus power plants and container facilities catering to the agri sector enjoy tax breaks. RIL had plans for a captive airport in the SEZ, which it could now move out, though it is not clear if it could avail the tax benefits.

Uncertainty surrounded the project after the eGoM on Thursday imposed a cap of 12,500 acres for a single applicant and said the states will not be involved in land acquisition for SEZs. Moreover, only those projects will get a go-ahead that have contiguous land. Although RIL has acquired large tracts of land, it has not been able to strike contiguity as the area includes several patches that are still owned by local land owners.

As per RIL’s original MoU with the Haryana government, the company was to buy 17,500 acres directly from farmers, and the state was to give the remaining 7,500 acres. Further, the state was to release its contribution only to help the company achieve contiguity, that too after the company had completed its share of land acquisition.