Land, green nod may delay SEZs in MP

After getting the "in-principle" clearance from an inter-ministerial committee, the Aditya Birla group-promoted Hindalco is now gearing up to develop its Rs 20,000-crore special economic zone (SEZ) at Bargawa in Madhya Pradesh's Sidhi district.

However, the company is yet to be issued a formal letter from the committee before it starts the process of acquiring 2,025 hectares, including private and government land, and environment clearances from the Centre and the state government.

Six economic zones have been cleared by the committee this month. However, land acquisition and environment clearance are proving to be the biggest hurdles to these SEZs.

"It is unlikely that any SEZ will come up this year due to procedural delay in land acquisition and environment clearances," an industry source told Business Standard.

Both Hindalco's SEZ and the Bhaskar Group-promoted SEZ propose a huge investment of more than Rs 20,000 crore each. Other SEZs given the green signal by the inter-ministerial committee include those of Medi Caps, Parshvanath Developers, the Madhya Pradesh government-promoted IT SEZ in Gwalior and the Indore SEZ.

Hindalco has plans to invest Rs 18,000 crore in the SEZ to set up an alumina smelter plant of 325,000 tonnes and a 750-Mw captive thermal power plant. "The project will also attract some downstream ancillary projects of Rs 2,500 crore," an industry source said.

Hindalco and the state government entered into a deal this year for the project. Later, Hindalco proposed a product-specific economic zone in the state. "Bargawa in Sidhi district has a huge land area which is not prime farm land and hence the acquisition of the land will not be an issue," said a government source.

The Madhya Pradesh government has failed to privatise its own and India's first SEZ developed few years ago in Indore. The state industry department is playing a developer's role instead of being a facilitator and prime land has been reportedly being allocated to select companies.

The Comptroller and Auditor General of India has raised questions about the allocation of land at the Indore SEZ in its report for 2005.

The second phase of the SEZ is yet to be developed and the consultant for the first phase of privatisation has to be appointed afresh since the state government has cancelled the previous bids.