RIL, IL&FS dissociate on Haryana Model Economic Township project

The Mukesh Ambani-led Reliance Industries (RIL) has announced a mutual and amicable separation in the agreement for strategic partnership between its subsidiary Reliance Ventures Ltd. (RVL) and Infrastructure Leasing and Financial Services Ltd. (IL&FS) to co-promote the Model Economic Township (MET) project of Reliance Haryana SEZ Limited (RHSL).

In a filing to the Bombay Stock Exchange, RIL said the Model Economic Township project would continue to be developed in the Industrial Model Township framework on the directly purchased land.

RIL had Sunday said it has returned around 1,384 acres of land in Gurgaon acquired for its special economic zone on the grounds that withdrawal of the concessions offered to SEZs has made such projects unviable.

"Reliance Haryana SEZ Limited (RHSL) on Friday (Aug 29) returned 1,383.68 acres of land in Gurgaon acquired from HSIIDC for setting up SEZs due to revision of strategic priorities," the company said in a statement here.

RHSL, a joint venture between Reliance Ventures Ltd. (RVL) and the Haryana State Industrial and Infrastructure Development Corp (HSIIDC), was established for developing SEZs and Model Economic Township (MET) projects in Haryana.

HSIIDC has also exited the JV and the project, the statement added. The SEZ project was located in Gurgaon and Jhajjar districts of Haryana.

The Haryana government had, in 2010, approved the development of the SEZ over the land transferred by HSIIDC in Gurgaon and development of a Model Economic Township on the directly purchased land.

"In March 2011, the Government of India withdrew the fiscal concessions of exemption of MAT and DDT for the SEZs," the statement said.

"Consequently, in January 2012, RHSL offered to return the 1,383 acres as SEZs became unviable with the withdrawal of fiscal incentives," it added.

The Model Economic Township project will continue to be developed in the Industrial Model Township framework on the directly-purchased land.

"On the directly-purchased land RHSL has developed 290 acres as an Industrial Colony where some multi-national corporations commenced production in 2012. The company has sought another licence for an additional 415 acres," the statement said.