The irony is stark. On the one hand, the Madhya Pradesh government is hawking its resources the world over; on the other, the state’s -- in fact, the country’s -- first operational special economic zone (SEZ) is yet awaiting privatisation seven years after approval.
The scene is Indore. The state’s dilution of stake in its fully-owned SEZ Indore Ltd has been a proposal since 2004. A year later, plans were drawn for the disinvestment in the entity by charting out ways to speed up the process on facilities, finances and sector-wise development through a private partner. Only that, things could not take shape so far.
Insiders in the industry believe the influential figures in Audyogik Kendra Vikas Nigam are derailing the privatisation process for their vested interest, but some attribute the jeopardy to other reasons: high-power tariff, shortage of rail racks and direct connectivity to various airports.
“The privatisation of SEZ is impossible till the government takes a tough decision,” says a senior industrialist who is observing the process. “For, officials at the lower rank play a key role in land allotment and land transfer under the existing system. The (proposed) privatisation would strip them of their powers.”
Adds another industry source: “Firstly, the government must simplify power tariff and ensure better connectivity to various airports across the world.”
The government, on its part, has not moved forward from appointing a consultant. Points out a senior official: “So far, three options have come up from our consultant Jaypee Associates: a) a private partner will be allowed to develop the third phase that covers a huge area of 800 hectares of land; b) the third phase will be on the development of the non-processing sector; c) the government should wash its hands off completely from the SEZ.” Whatever, “we hope to complete the process by this year-end,” he adds.
Earlier, an empowerment committee, which was formed in 2005 under the chairmanship of the chief secretary, had mooted a plan to dilute 26 per cent in the SEZ to allow the private partner to develop the SEZ in a planned manner. Soon, Reliance, DLF and Essel World were figured among the first nine contenders short-listed for the qualifying round. Subsequently, the process was shelved.
Mumbai-based Tata Economic Consultancy Services (TECS), had finalised seven out of nine contenders for SEZ Indore Ltd in 2007. But the government failed to initiate next round of short-listing the partner. TECS had short listed Gammon India, Wartsila India, Zoom Developers, L&T, Punj Lloyod, Tata Housing and Anik Developers. But the government dropped the process mid-way.
The first phase of the Indore SEZ has been developed on 1,038 hectares. As many as 33 units are operational and nine others are under completion. The SEZ, which has two complete phases, has posted handsome exports figures (Rs 1294.98 crore by last month) from Rs 55 crore in 2004-05. It has so far employed 12,257 people.
