Skywalks may help ensure smooth biz flow at SEZs

NEW DELHI: The commerce department is likely to suggest low-cost alternatives such as skywalks to developers for ensuring continuity within special economic zones or SEZs that have roads or railway lines running through.

The SEZ developers have argued that the present options of building flyovers and underpasses pushes up costs, reducing the incentives for building these dedicated enclaves of exports.

A favourable decision on the contiguity issue will help developers such as Reliance industries that have been facing problems in ensuring continuity within their zones.

The matter will be taken up at the next meeting of the board of approval for SEZs, the body which approves new SEZs and takes decisions related to functioning of the zones.

The commerce department will present its case before the revenue department, a commerce department official said.
The revenue department has always been careful about contiguity issues, as SEZs are tax-free enclaves and there is a danger of revenue leakage if sufficient care is not taken to ensure continuity within the zone.

However, following requests from some SEZ developers including Navi Mumbai SEZ (promoted by RIL chief Mukesh Ambani’s aide Anand Jain) for relaxation in contiguity norms, the board of approvals had asked the commerce department to make a draft policy on the issue.

Speaking to ET, a commerce department official said that the department agreed with the developers’ argument that construction of flyovers and underpasses for every small road or railway line that passed through the SEZ land jacked up cost and affected profitability.

“SEZs are all about cutting down costs and there is no point in having rules that push them up,” the official said. It is looking at cheaper options such as building skywalks.

However, the revenue department has to be suitably convinced that the new norms do not compromise security issues, before the relaxed norms are approved.

The BoA has representatives from a number of ministries and departments including commerce, revenue, agriculture and home. Once a decision on the issue is taken by the BoA, it has to be implemented through a notification.