After slowdown, giant SEZs take hardest hit in Haryana

Chief Minister Hooda, too, admits that the slowdown is impacting the state. “Haryana is not insulated from the overall economic state of affairs. None of our projects are delayed due to land acquisition problems,” he told this newspaper.

His argument holds water. Haryana’s favourable land acquisition policy (which was even commended by UPA chairperson Sonia Gandhi), along with its contiguity to the National Capital Region, ensured that the state got proposals from the bellwethers of Indian corporate sectors.

For example, the land acquisition process for the two major SEZs being set up by Reliance Industries Limited — at Jhajjar and Gurgaon — went smoothly. As Nitin Yadav, Deputy Commissioner, Jhajjar, confirms, farmers were more than ready to sell the land in view of the high compensation they were offered. Yet, the project hasn’t moved beyond that. There isn’t any sign of construction activity and, as a highly placed source in the Government revealed, Reliance has laid off over 200 employees in this SEZ project after having given them a notice of three months.

Then, there’s the case of K P Singh’s DLF Group, which was to set up two multi-product SEZs of 12,500 acres and 3,000 acres at Gurgaon and Karnal respectively. This, too, has been delayed.

The company, however, attributes this to the Central Government’s dithering over policy issues. Sanjay Roy, the official spokesperson of DLF Group says, “The Central Government has to come out with new guidelines for multi-product SEZs. They haven’t finalised anything yet, so we aren’t talking too much about our projects”. A similar SEZ proposed by Unitech is also being delayed.

Such massive SEZs, which often require huge investments, are the worst-affected victims of the economic meltdown. For example, Reliance’s multi-product Jhajjar project involves an investment of over Rs 25,000 crore. To be included in its ambit was a cargo airport and a 2,000 MW power project.

Matters have been further complicated, with the Central Government reexamining the size limit of SEZs and some companies have been forced to whittle down the scope of their projects. In Haryana, the sizes of both Reliance and DLF SEZs were truncated from what was originally approved.

However, it is worth mentioning that delays have afflicted mega multi-product SEZs far worse than sector-specific SEZs that are backed by serious investors.

One of the few projects on schedule is Raheja Group’s Rs 4,500 crore SEZ in Gurgaon. It is a sector-specific (engineering) project. Ajay Midha, Director SEZ, Raheja Group said, “Luckily, the engineering sector hasn’t been severely affected by the slowdown. We were formally notified in March and a lot of expressions of interest have come since then. The applications are pouring in and our project is moving as per schedule.”

Similarly, Orient Craft (India’s second largest garment exporter) is setting up a sector-specific SEZ in Gurgaon. Sudhir Dhingra, Chairman and MD of the company said that the project was on track, with all Government clearances through.