The Board of Approvals for special economic zones has deferred its decision on the Navi Mumbai SEZ.
The Navi Mumbai SEZ is promoted by Mukesh Ambani and consists of a 1,250 hectare area.
The BoA has cleared Suzlon, Vedanta, DLF and Unitech SEZs.
The Navi Mumbai SEZ has not received clearance due to contiguity issues, whereby two side-by-side SEZs are not allowed as it could flout the 5,000-acre rule. The BoA has asked the promoter for more details and is likely to clear it in its next meeting.
The contiguity rule is the bone of contention between the finance and commerce ministries.
The Mukesh Ambani promoted SEZ in Navi Mumbai might have to wait a while before it gets government approval. The Board of Approvals has asked for greater clarity from the promoters of the Navi Mumbai SEZ on the issue of contiguity.
This is because a rail line is passing through the area where the SEZ has been proposed. So even when land is in possession for the 1,250 hectare zone, the approval could get delayed.
Sources say that the officials of the revenue department in the BoA have adopted a strong stance on the issue. The finance ministry feels that if there is a throughfare, there could be revenue leakages and the commerce and finance ministries can't seem to find a middle ground on the issue.
Another SEZ by Reliance Industries, in Jamnagar, was held up for nine months on the same issue of contiguity. And since the BOA has to be unanimous in its approval, the contiguity issue could be another spoiler for the SEZ party.
The amendment in SEZ rules in March did relax the contiguity rule somehow. But it continues to be a problem for developers. Sources say, that for large SEZs spanning thousands of acres, it is virtually impossible to have a contiguous area without any public utilities. Even the Adani SEZ in Gujarat is held up because of a similar reason.
But while the Navi Mumbai SEZ might have to wait a bit for clearance to come through, the BoA cleared 15 other cases where land is already in possession of the developer.
These include, two Suzlon SEZs in Karnataka, one IT SEZ by DLF in Orissa. Vedanta's aluminium manufacturing SEZ in Orissa has also been approved and so has Unitech's IT SEZ in UP.
The next meeting of the Board of Approvals is on the 31st of May.
The SEZs that have been cleared are the Suzlon SEZ, which will be set up in Karnataka, and the Vedanta SEZ in Orissa, which will deal with the manufacture and export of aluminium. The DLF IT SEZ in Orissa and the Unitech SEZ to be set up in Greater Noida has also been cleared.
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