Adani plans to merge SEZs

For the first time since its inception in 2006, the Board of Approval on special economic zones (SEZs) in its next meeting in March will take up a proposal from a developer to merge these tax-free industrial enclaves for exports. The Adani group has sought the board’s approval to merge its three SEZs at Mundra in Gujarat. The merger will result in lesser expenses on infrastructure, utilities and administration.

Faced with a liquidity crunch, other developers too are expected to come to the board with a similar proposal. Reliance Industries-promoted Navi Mumbai SEZ Pvt Ltd is also planning to merge its notified zones in the Navi Mumbai area. “We were given five different land parcels; hence, we had to notify them separately," said a company source. An RIL spokesperson declined to comment.

The three adjacent Adani SEZs are situated near the Mundra Port which too has been promoted by the group. While two of these are multi-product zones, the third is a power SEZ. The combined area of the three SEZs is well over 6,000 hectares.

“The Board will discuss the proposal in its next meeting. Points that would come up for discussions include how to treat the processing and non-processing zones within the SEZs,” said a government official in the know.

According to SEZ rules, each zone needs to have a separate processing area for factories and units, as well as a non-processing area for houses, schools, hospitals and shopping arcades.

The three SEZs were notified separately as the Adani group bought the land in separate tranches. Moreover, a public utility road is present between the two multi-product zones. "There was a public utility road leading to an old port of Gujarat Maritime Board due to which there was a problem of contiguity. Hence we had to apply for notification for two different SEZs," said an Adani group executive.