Govt nixes plans of SEZ developers

Special Economic Zones sold by developers after receiving government nod to cash in on the recent boom, would now require fresh clearance from the Centre.

"Any change in ownership structure or name of the SEZ would require fresh approval from the government. This has been done to ensure that SEZs do not become a real estate business," official sources said.

Sources said some SEZ developers, including an IT SEZ and a multi-product zone, planned to sell their zones that have been approved by the Board of Approval at a huge premium.

Such a tendency among developers, although at a very early stage, is because of the recent government decision to limit the number of SEZs at 150 despite the huge interest generated by the scheme.

Commerce ministry officials said the approval is given to the developer, who obtains land and other clearances and then offers space to other companies for export promotion.

However, as there is no lock-in period in the SEZ Act 2005, a developer can sell up to 100 per cent of the equity after receiving approval for the zone.

The Board of Approval for SEZs has so far received as many as 388 proposals, of which 105 have already been approved.

Some of the companies in the fray to develop SEZs are Reliance Industries, Infosys, Wipro, Mahindra and Mahindra, ONGC and real estate firms such as DLF and Unitech.

The third meeting of the BoA was held on Tuesday to consider 169 proposals, including those of Vedanta, The Chatterjee Group and Suzlon.