South Korean steel major Posco has sought more time from the Centre for its Rs 53,000 crore multi-product SEZ in Orissa as it is yet to get adequate land from the state government.
An inter-ministerial Board of Approval (BoA), chaired by Commerce Secretary Rahul Khullar, will consider the request from Posco's subsidiary Posco India Pvt Ltd tomorrow, show the papers circulated among different stakeholders.
The company had received in-principle approval from the BoA for setting up the Special Economic Zone (SEZ) at Jagatsinghpur. The in-principle clearance was valid till last month. The approval was granted to the project in October 2009, which was extended till October 2011.
"The developer has requested for extending the validity further stating that Government of Orissa has leased 245.778 hectares of land. Environment Ministry on May 2, has accorded approval to Government of Orissa for diversion of 1,253 Ha of forest land. The forest land is likely to be leased by December, 2011," the papers said. The SEZ is to come up on 1,620.49 hectares.
Besides Posco, 16 SEZ developers including those of Gitanjali Gems Ltd and Parsvnath SEZ Ltd, have asked for extension of time to execute their projects.
Four developers, including Dr Reddy's Laboratories BA Tech Park Pvt Ltd and City Gold Realties Pvt Ltd have approached the government for surrendering SEZ projects.
While some have asked for de-notification of their SEZs due to change in their business plans, others have cited reasons like imposition of minimum alternate tax (MAT).
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"...Due to MAT, companies are reluctant to shift their operations into a SEZ," an official said.
However, six promoters, including Mundra Port and Kakinada SEZ Pvt Ltd, have approached BoA to set up new zones.
Exports from SEZs grew 26.2%, year-on-year, to Rs 1.76 lakh crore during April-September this fiscal.
Out of 381 notified zones, 148 are operational. Maximum number of them are in IT/ITES, engineering, electronics, hardware and textile sectors.
SEZs and Export Oriented Units (EoUs) contributed 34% to the country's export shipments in 2010-11.
However, in the wake uncertainties over tax incentives, scores of SEZ developers were given more time to execute their project and some of them have surrendered.
The draft Direct Taxes Code, which is to replace the Income Tax Act, has proposed withdrawal of exemptions for new units. Against this backdrop, the Commerce Ministry has floated a discussion paper to revamp the policy.