• Associate Sponsor

Gujarat HC issues notice to government on royalty from MPSEZ as PIL claims loss to exchequer

The division bench, led by Chief Justice R Subhash Reddy, has asked the MPSEZ, the state government and Gujarat Maritime Board to submit their replies by November 15.

By: PTI | Mumbai | Published: September 20, 2017 11:06 am
gujarat high court news, pil news, india news, indian express news Gujarat High Court. (File/Photo)

The Gujarat High Court on Tuesday issued notices to Adani Group-run Mundra Port and Special Economic Zone (MPSEZ), state government and Gujarat Maritime Board on a PIL claiming under recovery of waterfront royalty by the government from MPSEZ, causing “huge loss to the public exchequer”.

Sanjay A Joshi and Sanjay S Bapat, who had filed the PIL, claimed that despite highlighting the issue before the authorities, no action was taken which forced them to approach the court. According to the PIL, the state government through the Gujarat Maritime Board (GMB) entered into an agreement with the MPSEZ on February 17, 2001 “by way of which, upon fulfillment of various conditions, the MPSEZ was to be granted concession in payment of waterfront royalty to the state government”.

The petitioners claimed that “the payment of waterfront royalty at concessional rates was approved, subject to construction of various infrastructure facilities by the MPSEZ”. However, the respondent company was unable to complete the construction of the contracted assets in the scheduled time and therefore the MPSEZ was told by the state government to pay waterfront royalty at full rates, the PIL stated.

It cited the 2005 CAG report which stated that the 2001 agreement provided that at the end of the 30 years agreement period, the assets of MPSEZ will be taken back by the GMB at depreciated replacement value, and MPSEZ would pay the waterfront royalty on cargo handled at the port at a concessional rate.
“The difference between the actual rate of waterfront royalty and concessional waterfront royalty would be allowed to be set off against the capital cost of all contracted assets of the MPSEZ. The concession was to be given till the entire capital cost is fully set off. There was no provision in the agreement that the amount of concession would be deducted from the depreciated replacement value payable at the end of agreement period (i.e. 30 years),” the CAG report stated, according to the PIL.

Pending finalisation of the issue, the GMB had given concession of Rs 67.24 crore till March 2005 on payment of waterfront royalty but its deduction from depreciated replacement value to be paid at the end of agreement period was not yet assured, the PIL claimed.

The petition also cited that in the 2013 CAG report, the Gujarat government extended the port limit for four single buoy moorings (SBMs) without signing the required supplementary concession agreement to legally enable the state government to set off the amount of concession availed by it at the time of transfer of Mundra port.

The division bench, led by Chief Justice R Subhash Reddy, has asked the MPSEZ, the state government and Gujarat Maritime Board to submit their replies by November 15.

For all the latest India News, download Indian Express App

  1. S
    Sanjay bapat
    Oct 2, 2017 at 6:03 pm
    Good
    (1)(0)
    Reply