SEZ mess: How it all started

12 Jun 2008, 0232 hrs IST, Preetu Nair, TOI

PANAJI: The Special Economic Zone Act was enacted by the Centre in June 2005, but the Goa government was exploring possibilities right from December 2004. The first time that the government considered SEZs was on December 29, 2004, when under the chairmanship of then chief minister Manohar Parrikar a decision was taken at a Goa Industrial Development Corparation (GIDC) meeting to earmark land for a food park, a biotech park and an SEZ. At a subsequent meeting on April 15, 2005 chaired by industries secretary Jayashree Raghuraman (Goa was then under Central rule), it was decided to "explore the possibility of setting up food park and SEZ at Keri and bio-tech park at Verna".

It was two months later—June 23—that the Centre enacted the SEZ Act 2005 and another 12 months—June 5, 2006—before the Goa government came up with an SEZ policy. In the meantime, in March and April 2006 GIDC had already accepted applications from companies for SEZs. Information available with TOI reveals that allegations of procedural impropriety and blatant irregularities against the SEZs could well be true. These facts and many more irregularities have come to light following documents made available by the government under the Right To Information Act. The documents reveal that land was allotted to the companies even before the Goa SEZ policy was formulated. Of the three notified SEZs, two—K Raheja Corp Private Limited and Meditab Specialities Pvt Ltd—had the blessings of then chief minister Pratapsingh Rane and industries minister Luizinho Faleiro.

"The said proposal has been forwarded to us by the industries minister with the approval of the chief minister with the direction to consider their proposal," said the agenda note for GIDC's March 28, 2006 board meeting regarding Meditab's proposal. Similarly, the agenda note for the April 19,2006 GIDC board meeting said, "The chief minister as well as the industries minister are in support of the above allotments (land for Raheja and others)." The third SEZ, Peninsula Research & Development Centre, was "under formation" when GIDC reviewed their application and decided to allot land on March 28, 2006. Interestingly, in the April of that year, before the Goa SEZ policy came into existence, GIDC had already accepted applications from the three SEZs.

The irregularities continue. Two of the applications, those of Raheja and Peninsula, don't have the company seal, nor an inward stamp of GIDC and just one eye witness, instead of two. This raises doubt over the date the applications were received by GIDC and whether the GIDC issued the mandatory seven day notice to call a board meeting. The industries and labour department regulations clearly state that ‘the secretary shall give seven clear days notice of the ensuing meeting to each member of the corporation'.

Though GIDC in its agenda note for a meeting on February 7, 2006 proposed to revise the premium rate of plots in the industrial estates, it went easy on the three SEZs. This despite the fact that GIDC had decided that all new applications for plots and transfer of plots will be based on revised rates. While the price of plots for the industrial units at Verna phase I, II and III was hiked to Rs 750, the SEZs in phase IV were charged only Rs 600. Further, while the rate of land at Sancoale industrial estate was hiked from Rs 125 to Rs 400, Peninsula was charged just Rs 250, as the ‘area proposed for allotment is sloppy and without proper access'. Meditab got their land at the cheapest possible price of just Rs 80 per sq m.

The documents also reveal that GIDC relaxed the land rates, reduced the 2% annual lease rent that it had unanimously decided to charge in industrial estates effective from April 1, 2006, to 0.5% for the three SEZs. The lease signed is for 30 years, with a provision to extend it to 95 years. Further, though in the lease agreement with the three SEZs transfer of land was prohibited without GIDC consent, minutes of the GIDC meeting of April 19, 2006, reveal that the GIDC will not charge transfer fees, sub-lease or assignment charges from them. This would allow the SEZ developers to sub-lease or transfer the land to anyone at a price, without in turn paying the GIDC.