PIL accuses Surat SEZ of duping state exchequer

Social worker and farmer leader, Sandeep Desai, has accused the Diamond and Gem Development Corporation (DGDC), the developers of the Surat Special Economic Zone (SurSEZ), of duping the local business community and causing a huge loss to the state exchequer.

Desai has also filed a public interest litigation (PIL) against the DGDC in Gujarat High Court, a few months back.

Addressing a press meet on Saturday, Desai said, "DGDC is headed by S N Sharma, a former IAS officer. Sharma utilised his contacts and obtained land measuring 9.76 lakh sq. mt. at Sachin GIDC at concessional rate, for developing a private sector Special Economic Zone.

"DGDC, instead of facilitating the units and production for exports, has acted as an estate agent or a builder, and made a business out of SurSEZ. The land at Sachin was acquired for a meagre amount, but DGDC leased out the same to unit holders at the price of Rs 1,800 per sq. yard. The entire sum collected in this manner has been pocketed by the company," Desai alleged.

"According to the government policy, DGDC was required to provide world-class infrastructure in SurSEZ. But it has not even provided basic infrastructure such as road, water, street lights, drainage, etc. As a result out of 320 plots in SurSEZ, only 53 units are operational. The government has not been able to achieve any of its targets by setting up this zone," Desai said.

"Around 70 to 80 plots in SurSEZ have been allotted by DGDC to persons who are not eligible to set up units in SEZ and who have not been issued a Letter of Permission (LOP) by the competent authority. All rules and regulations have been clearly violated by DGDC, and any person, who is willing to pay money has been allotted plots in SurSEZ," Desai charged.

"DGDC is also the developer of SEZs in Haldwani (Uttaranchal), Jaipur and Karnataka. Due to similar irregularities committed by DGDC, these three zones have almost been closed down. If corrective steps are not taken at the earliest, it could soon be the turn of Surat SEZ," he said.

"DGDC is collecting Rs 1,800 as lease rentals from each of the unit holders as against the Rs 9 charged by administrators of Kandla SEZ. The unit holders are also required to pay 0.2 per cent service charges on the monthly turnover. No service charge is levied at the other SEZs," Desai said.

"The unitholders are also required to pay various other charges such as charges for handling cargo for import as well as export, for supply of water, issuing identity cards for employees working in the zone, etc." he said.

Desai also alleged that DGDC has also duped financial institutions. "DGDC had taken a loan of Rs 18 crore from IDBI. Though it is has enough money, it is yet to start the repayment of the loan. This will add the interest burden hurting the ultimate beneficiaries. DGDC has also taken loans from State Bank of India, Industrial Finance Corporation of India and Indian Bank," he said.

"DGDC and S N Sharma have caused huge losses to the state exchequer. The government should order a CBI inquiry into this scam. We are demanding that steps be initiated to seize the properties owned by DGDC and S N Sharma, failing which we will launch an agitation," Desai added.

S N Sharma, chairman, DGDC was the former chairman and managing director of Hindustan Diamond Company Ltd, a Union government undertaking, from 1972 to 1989.