Another SEZ melts down in state

Recession it seems has claimed its first big victim in the country’s realty sector. DLF, one of the biggest realty companies of the country, has decided to get its proposed Rs850 crore IT Special Economic Zone (SEZ) in Gandhinagar de-notified.

If the Board of Approval (BoA) in New Delhi agrees which, given the precedence, it most probably would, this will be the second special zone that Gujarat would have lost. Senior government officials, however, refused to confirm the development.

Earlier, the state government had, in a huff, cancelled the 26-acre land allocated to Satyam in Gandhinagar after the scam in the company came to light. The latest development has left the state government red-faced for the second time in the last three months, not to mention its effect on the IT industry in the state.

The MoU for the DLF SEZ was signed during the Vibrant Gujarat Global Investors’ IT Summit (VGGIIT)-2006 and the foundation stone for it was laid by the chief minister recently at a ceremony. The SEZ was notified in June 2008.

According to sources in DLF, the company has requested the BoA to de-notify five out of its nine notified SEZs across India. The Gandhinagar SEZ is one of the five in the list. The zone was to come up over 25 acres of land near Infocity in Gandhinagar.

The project was expected to create jobs for some 30,000 people. It was to be completed in about 18 months. DLF had planned to invest Rs 3,000 crore in establishing three IT SEZs, one each in Gandhinagar, Ahmedabad and Vadodara. However, only the Gandhinagar SEZ was notified.

It is not known exactly what will happen to the land given to DLF for the SEZ, or the other proposed investment of the company in the state.