MIHAN SEZ, a failure?

In a shocking admission of failure, the Maharashtra Airport Development Company (MADC), the body in charge of the MIHAN Special Economic Zone (SEZ) in Nagpur, has revealed that six years since its inception, the SEZ has failed to attract industrial investment or create jobs for the people of the region. This is in stark contrast to the declarations being made by the politicians from the region, including chief minister Prithviraj Chavan, about the bright future of MIHAN from time to time.

The truth came out following an RTI application by city-based businessman and political worker Anil Wadpalliwar. “One of the documents given to me was a letter dated September 12, 2011, written by U P S Madan, MADC vice chairman and managing director, to the Board of Approvals (BoA) of SEZ, and it paints a very bleak picture of the SEZ,” he says.

The letter states that out of the 59 companies which had received land allotment in the area, only three have succeeded in starting partial operations. The number of jobs generated is 655 as compared to the promised 120,000.

The letter was written in response to a showcause notice issued to MADC by the BoA in July 2011, after the former MADC chief R C Sinha, granted permission to Reatox Builders and Developers Pvt Ltd, who built a residential complex within the SEZ area called First City, to sell it to the general public. Such complexes are meant strictly for people working in the SEZ. The letter pleads the total absence of demands for housing from SEZ employees and requests for permission to denotify the 12.55 hectare (ha) of land on which the complex has come up, so that they can be sold to the general public.

The request for denotification was granted on November 28. The BoA, however, made it clear that the decision is a one-off case considering the fact that Reatox had been allotted the land in question prior to the notification of the SEZ, and should not be treated as a precedent.

The chief minister’s effort to attract industrial investment to the SEZ has not evoked much response. Despite his recent assurance that Nagpur will be an “aviation hub”, the fact remains that companies like Mahindra Tech, Boeing and several other IT companies, whom Chavan had encouraged to shift from Pune to Nagpur, have merely sought extensions for the letters of permission to set up offices, which are about to lapse.

MIHAN was approved as a multi-product SEZ in 2006 with an area of 2,086 ha. Till date, MADC has already spent Rs 850 crore in developing basic infrastructure like roads, street lighting, water, a captive power plant and so on. “The revelations in the letter put a question mark on the justification of such large scale land acquisition and huge investments,” says Wadpalliwar, who is planning to move court through a public interest litigation. “It is quite clear now that the SEZ is unlikely to take off, and instead of parcelling the land out to real-estate developers, it should be returned to farmers, as in the case of the Noida SEZ,” he adds.