More than 150 zones have been notified by Central government as special economic zones. Even as the rush to set up SEZs continues, there are reports that banks and financial institutions are becoming reluctant to fund land acquisition and development of zones. Shorn of all trappings, SEZs are about world-class, reasonably priced infrastructure and a hassle-free work environment for export-based industrial units. But where are the units? Do they understand the complexity of the scheme? Are they aware of the dos and don’ts of buying land for SEZs? Who is ensuring the reasonableness of what is being offered to them? Can different zones market land on different terms? What is the guarantee that the development will actually set up the proposed infrastructure? What about the reasonableness of infrastructure use charges and sanctity of contract? Who can guarantee stability for infrastructure usage charges, like those for electricity, water, sewage, infocom, and so on? Is land available on a leasehold or freehold basis? What will happen to leasehold rights after they expire? Does sale and subsequent transfer require government permission? Is there a regulatory mechanism in place to safeguard the interest of the unit? What about dispute settlement mechanisms? Can a small unit approach the Board of Approval in Delhi in the hope of getting quick justice?The questions just multiply. We need to provide answers. An approved master plan and development control regulations need to be seen by the entrepreneur, and there should be regular due diligence before land for an SEZ is bought. It should actually be the responsibility of the sovereign authority to ensure that basic legal and regulatory requirements have been met by the developer. This exercise should go to the extent of vetting the draft sale contract. If a few units are duped by some unscrupulous developers, the entire SEZ will stand discredited.Gujarat was one of the first states to pass the SEZ law. It did so in 2004 and addressed the deficiencies inherent in the Central law. However, subsequently, the Central SEZ Act 2005 came into effect. There is a major disconnect between the two laws. While the Central law takes a developer-oriented approach, the state law sings a slightly different tune. It makes it incumbent upon the state government to guide the entrepreneur/unit in an SEZ scheme and ensure the availability of the infrastructure promised. Here we should take a lesson from international models, like that of Jebel Ali, where the zone entity signs the agreement guaranteeing benefits, exemptions and charges, for a period of 50 years.Till we sort out numerous issues of this kind and, most importantly, ensure that the unit holders are not duped — either intentionally or unintentionally — SEZs will remain bogged down and perceived as a scheme ‘of the developer, by the developer and for the developer’. The writer is a former IAS officer in the Gujarat cadre
