Responding to VAL’s request, the Odisha government has recommended the proposal to the Director, SEZ under Union ministry of commerce & industry.
“The government is pleased to recommend the proposal of VAL for partial de-notification of non-processing area of VAL-SEZ at Jharsuguda. Any tax concession availed by VAL either from the Government of India or from the state government in procuring the materials towards the construction activities in this patch of land proposed for de-notification have to be refunded to the Centre/state government,” S C Naik, additional secretary (industries) wrote to the director, SEZ under Union commerce & industry ministry.
VAL officials could not be reached for comments on the matter.
The company had recently sought extension of SEZ benefits for its 1.25 million tonne aluminium smelter project at Jharsuguda.
VAL has already invested Rs 12,000 crore on the smelter complex. The project was set up as a sector specific SEZ for producing aluminium metal in line with the notification of the Union commerce ministry.
The aluminium smelter plant was on the risk of turning unlivable amid uncertainty in receipt of alumina from the company’s refining unit at Lanjigarh. The refinery was now running barely at 60 per cent capacity through procurement of bauxite from states like Gujarat, Chhattisgarh and Jharkhand. Between December 2012 and July 2013 when the refinery faced shutdown as bauxite sources dried up, the aluminium smelting unit had to depend entirely on imported alumina to maintain its operations.
The commissioning of VAL’s multi-product SEZ at Jharsuguda has been delayed considerably due to want of state specific SEZ policy. Due to lack of the policy, various government departments were unable to extend the SEZ benefits.
VAL said commissioning of the SEZ facility promised to boost the local economy by generating business potential worth Rs 15,000 crore every year. Direct and indirect employment opportunities for nearly 12,000 persons are set to be created.
The facility is also expected to develop local infrastructure besides boosting numerous small scale enterprises.
Since the Odisha government has granted its concurrence to grant the SEZ status to the smelter plant, VAL said the state SEZ policy should be applicable to the establishment.
The company has also suggested that developing and setting up of downstream industries in the area adjoining to the smelter should be made mandatory.