M&M SEZ to raise storm in Rajasthan

The controversy over Mahindra & Mahindra's plan to set up a special economic zone (SEZ) in Rajasthan is refusing to die down, with the Congress, trade associations, and farmers raising their voice against it.

The main opposition, the Congress, is ready to raise the issue in the Budget session of the assembly, slated to start in the last week of February. Mahindra group firm Mahindra Gesco Developers Ltd is to set up the Rs 10,000 crore "Mahindra World City", an SEZ near Bagru, around 30 km from here.

The company has signed a memorandum of understanding (MoU) with the state government.

"I will raise the SEZ issue in the assembly. From the way it was cleared by the state government and the kind of irregularities the MoU has, the project has raised suspicions," the president of the Rajasthan Congress, B D Kalla, told Business Standard.

He said he had done a thorough study of the SEZ and questioned the wisdom of the BJP government to undertake the project in a joint venture with the Mahindra group.

"Giving the Mahindra group 51 per cent in the joint venture seems meaningless. According to the MoU, infrastructure like roads, water and power back-up would be that of the Rajasthan State Industrial Development & Investment Corporation (RIICO). Moreover, Mahindra has not categorically specified as to how much investment it will make in the project. Also, it is not clear on which area of land the SEZ will come up," Kalla said.

"What remains unanswered is whether the Mahindras would build industrial parks and residential townships. Has the government received the project report from the Mahindras, and what has the state government done to prepare the feasibility report? If the report was received by the government from the Mahindras, why was it not presented before the Cabinet, which approved the setting up of the SEZ?" Kalla asked.

Kalla strongly objected to the terms of the MoU, which suggest that the Mahindra group's share can never be lower than 51 per cent. RIICO's share would be 49 per cent and this too could be lowered, he said.

"The Mahindras' claim that the proposed SEZ will generate employment for over 100,000 persons is baffling. There are eight SEZs in the country, with an investment of Rs 18,000 crore. Together, they have created jobs for 100,000 people". Kalla added, "Now there are 100,000 farmers cultivating the proposed land. So does it not amount to taking away their jobs to create the same number of jobs? How do the Mahindras justify it?" .