Over 26 SEZ projects remain non-starters as poll code delays government clearances

Written by Kirtika Suneja | New Delhi | Updated: Mar 12 2014, 11:24am hrs
The extension projects of companies like Dr Reddy's Andhra Pradesh unit for pharmaceuticals and APIs, Zydus Pharma's unit in Ahmedabad special economic zone (SEZ) and Alstom Bharat Forge Power's unit in APSEZ in Gujarat have been languishing for the last four months for want of statutory letter of permission (LoP) from the government.

The Board of Approval (BoA), headed by commerce secretary Rajeev Kher, which grants these approvals, has not met since November. The BoA was supposed to meet on March 10 but did not. The meeting has been postponed twice and as per a ministry official, the meeting will not happen anytime before the general elections due to the imposition of the model code of conduct.

There are more than 26 such proposals from various SEZ developers, including Dr Reddy's Laboratories, Vedanta Aluminium and Tata Consultancy Services, that have asked for more time from the government to implement their projects and are awaiting the commerce ministry's nod. While Zydus has invested more than R500 crore in two units, Dr Reddy's expansion projects entail an investment of R150 crore.

Other developers that have sought additional time include Alstom Bharat Forge Power, Sesa Sterlite and Cognizant Technology Solutions.

Vedanta Aluminium has asked for an extension of the validity of the approval granted by the board for setting up an SEZ in Odisha beyond May 22. Till now, 572 SEZs have been approved, out of which 390 have been notified and 181 are operational.

Dr. Reddys Laboratories' CTO unit in the firm's SEZ has completed all the work relating to the plant and machinery and at present, trial and validation batches of some products are in progress.

The stringent norms take more time for commercialisation of the pharma plant. The unit has been expecting to commercialise three to four products in the first quarter of 2014-15, the company said of its CTO unit.

As for the FTO unit in the same SEZ, Dr Reddy's is undertaking trial runs and validation batches of some of the products are in progress and is expected to commercialise the production of some of the products during the first quarter of 2014-15. Hence, the unit has requested to extend the LoA by another year upto April 18, 2015.

Similarly, Zydus Pharma's two units in the Ahmedabad SEZ have sought extension which are to be taken up by the BoA. Zydus Technologies, which manufactures various transdermal patches (medical patches), has been granted four extensions validity to up to June 28, 2014, and has requested for a further extension of the validity.