Financial Daily from THE HINDU group of publications
Thursday, Jun 27, 2002
Industry & Economy
Jamnagar chemical estate may form the core of Gujarat SEZ
AHMEDABAD, June 26
THE Gujarat Government, which is giving finishing touches to its Special Economic Zone Policy, has targeted a notified chemical zone at Jamnagar as its core to fashion a unique strategy, different from other States.
As a first step, the Government has set out to carve a 4,000-hectare SEZ in the existing chemical estate at Dahej before it attempts to consolidate the existing units at Jamnagar into a chemical industrial park.
Towards this, the State Government has roped in the services of international consultant Ernst & Young, along with that of Consulting Engineering Services and the India Development & Environment Agency. The assignment as spelt out by two of the State's nodal agencies, the Gujarat Industrial Development Board and the Gujarat Industries Development Corporation, is to gauge the possibility of developing the Jamnagar region as an industrial park.
Given the presence of mega projects by Reliance Industries, Essar Refinery, Bharat Oman and Positra SEZ in Jamnagar, the mandate to the consultants is to weigh the pros and cons of developing a chemical park of international scales in the region. The stress would be on giving shape to a mega development plan which would take care of the environmental concerns peculiar to the chemical sector rather than leaving each of the individual companies to fight out these issues on their own.
On the execution side, the chemical SEZ at Jamnagar could be spun off by floating a special purpose vehicle (SPV) to this end where the State could have a 26 per cent equity stake in the venture, feel the consultants.
While it may be left to the State bodies such as GIDC and the Gujarat Maritime Board to pick up this equity by way of land and port facilities, there would be no dearth of potential private participants, both domestic and offshore, taking into consideration the entities which have already set up shop in Jamnagar.
According to an interim report of the consultants, the benefits that would accrue from an SEZ would be a structural prerequisite for refining and chemical companies with an eye on exports. Some of the refineries that are being planned in the region stand to gain from exemption of excise duty on capital goods. However, the State Government is yet to come to terms with the inherent contradiction that would be posed by the Rs 6,000-crore Positra SEZ that is getting located in the same area.
Just as the Positra SEZ, one of the first SEZs to be given the nod by the Centre is at an advanced stage of planning, the Gujarat Government has recently acquired 1,770 hectares in Mundra for the proposed SEZ to be put up by the Adani Group there.
With two greenfield SEZs already in the making and another one at Kandla getting upgraded as an SEZ, it remains to be seen whether the once shelved plan for mega chemical industrial estates in SEZs could get cleared by the Centre for the sake of Gujarat, whether the location be Dahej or Jamnagar.
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