Haryana to take back SEZ land from Reliance Industries
The Haryana cabinet Friday approved a proposal for taking back 1,383.68 acres of land from Mukesh Ambani-led Reliance Industries, meant for setting up of the biggest public-private partnership (PPP) model special economic zone (SEZ) in the country.
Chief Minister Bhupinder Singh Hooda told media after the cabinet meeting that the government had decided to take back the land which had been given to a Reliance Industries subsidiary, Reliance Haryana SEZ Limited (RHSL) through the Haryana State Industrial and Infrastructure Development Corporation (HSIIDC).
The SEZ, which was to be spread across 25,000 acres in Haryana's Gurgaon and Jhajjar districts, close to national capital New Delhi, had been announced in June 2006 with great fanfare by the Hooda government. Mukesh Ambani had specially flown down to Chandigarh for the agreement signing in December 2006.
Hooda said the Haryana government will pay Reliance Industries Rs.343.51 crore for the land being taken back. The land was acquired by the state government and given to the RHSL through HSIIDC. The rest of the land was to be acquired by RHSL on its own.
The SEZ project became economically unviable due to mid-term corrections in the SEZ policy by the central government, especially capping the SEZ land at 12,500 acres, withdrawal of tax holiday, slowdown in global economy and high land prices making acquisition difficult.
The RHSL had in January 2012 offered to return the land to the Haryana government and had sought a refund of Rs.1,172 crore.
Hooda said the land would not be returned to farmers from whom it was acquired for a specific purpose and the global city scheme will now come up there.
"The Haryana government will take back the land from Reliance and a scheme of a global city shall be implemented on the same land.
"This will be part of the Delhi-Mumbai industrial corridor. It will have exhibition grounds, convention centres, innovation and knowledge industries and other facilities that will be set up there. It will be a major economic centre," he said.
"The land is in our (government) possession. Reliance demanded Rs.1,172 crore from the government. We have agreed to give them only Rs.343 crore," Hooda said.
The HSIIDC and Reliance Ventures Limited (RVL), a 100 percent owned subsidiary of Reliance Industries Limited, had entered into a joint venture (JV) agreement on June 19, 2006.
HSIIDC had transferred an area of about 1,383.68 acres at village Garhi Harsaru to the special purpose vehicle floated by HSIIDC and RVL for implementing the project - Reliance Haryana SEZ Limited (RHSL) - for a consideration price of about Rs.399.85 crore.
"The project configuration was subsequently changed to a SEZ in Gurgaon district over 12,500 acres and a Model Economic Township over 12,500 acres in Jhajjar district. Reliance was able to purchase about 7,100 acres in Jhajjar district and another about 1,200 acres in Gurgaon district, which however was not contiguous," a Haryana government spokesman said here.
"It emerged during a review of the progress on the project that the SEZ project had been rendered economically unviable due to the mid-term corrections in the SEZ policy viz. imposition of the Minimum Alternate Tax (MAT), withdrawal of the tax holiday, slowdown in the global economy, prohibitively high prices of land and other problems associated with aggregation of land through private negotiations.
Sensing the difficulties, the chief minister had requested Reliance to return the HSIIDC land. The RHSL offered to return the land in their January 2012 letter and had requested refund of the amount paid by them to the HSIIDC and re-imbursement of expenditure incurred on the site, apart from interest on it, aggregating to Rs.1,172 crore, the spokesman said.
After getting legal opinion, the Haryana Investment Promotion Board headed by the chief minister, decided to accept the land return offer.
The spokesman said that RHSL's claims on account of administrative charges forming price of the subject, refund of stamp duty, reimbursement of development expenditure and interest amount have not been accepted.
"The refund amount has been worked out strictly as per the terms of the Joint Venture agreement," he said.
(Posted on 07-02-2014)
Free Yearly Horoscope: Select your zodiac sign