Hit by slowdown, developers put SEZs on hold

Slowdown woes are hitting special economic zones (SEZs), which were much in vogue until a year or two ago. Many SEZ projects across the country are being put on the backburner.

Two weeks ago, the board of approvals had allowed an extension to two developers who could not get their SEZ project going on time. Many such SEZ developers have been forced to delay their projects since companies have put off their expansion plans. Out of 552 approved SEZs across the country, only 274 have been notified so far. In Karnataka, only half of the 50 approved SEZs have been notified so far.

Bhaskar N Raju, Executive Director, Divyasree Developers, says, “The frenzy with which people were going ahead with SEZs two years ago — applying for six-seve SEZs — they are now now re-looking at those options. We have four SEZs. One is 60 acres and the other is 70 acres. The 60-acre plot is done with approval and going through notification. We're thinking of slowing it down or even withdrawing the application.”

Approved SEZs have three years to get notified and implemented. There are around 179 such pending SEZs across India. Some big developers are now asking for extension. But experts feel it may not be practically feasible to extend the deadline for all developers.

Mahesh Jaisingh, Director, BMR Advisors, Bangalore, says, “The criterion would be whether the net worth is above the threshold prescribed and approved at the time of application itself. Also what's going to be looked at is the repute of the developer, examination of what work has been done in the last three years.”

But for the two SEZ projects that were given extension — the period is one and two years respectively — sources say might get further extended if there is a valid reason to do so.