A Question of Time?

With deadlines in prospect for time-bound development rights for SEZs in many states, promoters are having to seek extensions. This is the case in two high profile SEZs : Quark City in Punjab (the state's only IT SEZ), and the (Mukesh) Ambani Reliance Haryana SEZ (a 90:10 joint venture betweeen Ambani and the state government). In both cases, the reasons cited for the delay in completing the planned developments is the global financial-crisis-cum-recession.

It is clear, however, that in both cases, other factors have been at work. The Reliance-Haryana project has been beset with problems from the outset, including slow acquisition of land, the changing size-ceiling norms under the SEZ Act's amended rules, frictions with the state government, and charges of corruption (leveled by Bhajan Lal's son, no less).

The Quark City project in neighbouring Punjab is also facing delays arising from a broadly similar set of constraints, though the size issue is of a different magnitude (it is much smaller). The fact that Quark's promoters also have two other SEZs under development in the state may influence the decision on their request for more time.

There are other cases elsewhere in India where extensions will be needed/requested. A key issue will be the attitude of the state governments concerned (thought the official decision on whether to grant an extension rests with the BoA in Delhi). It will be revealing, perhaps, to see how inclined state governments are to accommodate the various promoters -- particularly in states where elections have seen a new party or coalition come to power.