SEZs May Get More Time to Start Projects
The board of approval (BoA) for special economic zones (SEZs) has entrusted its chairman, commerce secretary GK Pillai, to give more time to cash-strapped developers of SEZ projects beyond the three-year deadline to start work so that their projects do not lapse.
The nodal body that clears SEZ proposals, which has stopped meeting because of the election model code of conduct, has received applications from 50 developers seeking extension, a commerce department official said, requesting anonymity.
By entrusting Mr Pillai to clear these requests, the board seeks to help out promoters whose approvals will lapse if they do not get an extension. “There are some cases where the approvals would lapse if not extended immediately. The commerce secretary, in his capacity as the chairman of the board, is clearing such applications,” the official said.
The SEZ rules allow developers up to three years to start work on their projects after receiving formal approvals. If the developers are not able to show any sign of activity in the zones within this three-year period, the approvals would lapse. Once approvals lapse, the developers need to seek fresh approvals.
“Many developers have not been able to make investments because of the credit crunch. Most of them deserve to get an extension. It seemed unfair to make the developers go through the rigor of applying again just because their applications are scheduled to lapse during the ongoing elections,” the official added.
The board comprises officials from various ministries including finance, commerce and urban development. Despite the slowdown in investments, exports from SEZs have shown a robust growth of 33% to Rs 89,000 crore ($18 billion) in 2008-09.( ET Bureau)