Mukesh: Hurdle race

Mumbai, Aug. 31: Mukesh Ambani’s plans to establish special economic zones (SEZ) across the country are starting to fall into place after a series of setbacks early this year.

Far from the glare of media scrutiny, farmer protests and political opportunism, Ambani has won approvals to increase the size of his proposed multi-product SEZ at Jamnagar in Gujarat by over 40 per cent.

On Thursday, the group of ministers on special economic zones granted state governments the discretionary right to acquire land if the developer had possession of 70 per cent of the land identified for the project.

The two decisions are expected to jump-start Ambani’s plans after the government insisted he scale back the size of his Navi Mumbai SEZ to 5,000 hectares from the proposed 10,000 hectares and barred the Maharashtra government from acquiring land for the Raigad SEZ in the face of violent protests by farmers.

Reliance Jamnagar Infrastructure Ltd, the group company which is implementing the SEZ, is increasing the area to 1764.10 hectares from 1224.10 hectares. The board of approvals (BoA) cleared Ambani’s proposal after the state government came out in strong support.

Reliance Jamnagar Infrastructure is a wholly owned subsidiary of Reliance Industries Ltd (RIL). At a meeting of the BoA held on August 8, the state government said only 540 hectares of land that is contiguous was in possession of the developer. Earlier this year, the empowered group of ministers on SEZs had decided to limit the area for all SEZs to 5,000 hectares and said the land would have to be contiguous with no public roads splitting the expanse.

Details about Mukesh Ambani’s SEZ in Gujarat are very sketchy. However, group company Reliance Petroleum Ltd is setting up a mega greenfield refinery and a propylene plant at the SEZ.

Many expect the Jamnagar SEZ to be one of the first to come up because of its proximity to the new refinery which is expected to start operations by December next year.

The combined investment in the refinery and the SEZ is estimated at Rs 40,000 crore. Earlier, a bench of the Supreme Court had dismissed a special leave petition by a few people who had challenged the land acquisition procedure for the SEZ.

However, an official from the Reliance group said he was unaware of any proposal to increase the size of the Jamnagar SEZ.

The petrochemcial industry is expected to occupy the most space at the Jamnagar SEZ though it is learnt that players from other industry groups will also be establishing units there.

Unconfirmed reports had speculated that in addition to Dow Chemicals, Reliance had invited global petroleum giants like Shell and Exxon Mobil to set up downstream units in the SEZ which will use products from the adjacent refinery as feedstock.

The Reliance group was also at one stage toying with the idea of setting up a pharmaceutical unit through Reliance Pharmaceuticals Ltd, a unit of Reliance Life Sciences.

Besides the Jamnagar project and two SEZs in Maharashtra, the group has plans to establish an SEZ in Haryana over 25,000 acres.

While many other companies have expressed interest in setting up SEZs across the country, the BoA has approved more than 365 SEZs.

More than Rs 45,000 crore has been invested in over 136 SEZs that have been notified. By the end of this year, investments could top Rs 100,000 crore.