CHENNAI: Many power firms and the Indian Space Research Organisation (ISRO) are keen on acquiring lands earmarked for the long-pending Nanguneri SEZ project, but the State government is unable to transfer them. The main issue is that the government is struggling to get back the lands from the joint venture (JV) firm floated for developing the Nanguneri SEZ, which has remained a non-starter for 24 years now.
This also comes as ISRO is proposing a second spaceport in Tamil Nadu which sources believe could benefit the southern belt of the State. Sources told TNIE that in order to promote industrial growth in southern TN, the State proposed a hi-tech Industrial Park (HIP) in 1998 in Nanguneri and through State-owned entity TIDCO, formed a joint venture (JV) with private firm INFAC Management Corporation (IMC). To develop this project, the State government acquired 1,534 acres of patta land and alienated 575 acres of poramboke land in favour of TIDCO in 2000. TIDCO transferred the above acquired patta land through a sale deed in May 2001 in favour of the JV.
Meanwhile, the plan to develop HIP was dropped after the Union government announced the project as a Special Economic Zone in September 2000. In 2006, the government inducted a new entity, AMR Group, as co-promoter in this project, with shareholding of 68 per cent. The company was asked to arrange about 400 acres of land so the project could meet the minimum area requirement of 2,500 acres to qualify as a multi-product SEZ.
“The JV company entered into a sale agreement in January 2007 for 410 acres of land belonging to GR Mutt, a Hindu charitable board, and sent in a proposal for multi-product SEZ, which was notified in 2008. In 2011, part of the SEZ was made functional. At this juncture, the majority stakeholder, AMR Group, pushed for induction of Kolkata-based SREI Infrastructure Finance Ltd (SREI) as strategic equity partner in the project,” the sources said.
“TIDCO initially gave in-principle approval for the induction of SREI, on the condition that it pays the current price of the lands. However, SREI disputed the clause and said the cost of the lands was already paid and settled. Later, it was found that the JV company transferred shares to an extent of about 58 per cent to SREI, pending formal approval of TIDCO or the government. This made SREI the majority stakeholder in the JV,” the sources added. However, SREI is now facing liquidation. The total debt of the group is estimated to be close to Rs 35,000 crore.
Sources say the government wants to get back the 1,500 acres of land from the JV firm. It is learnt that TIDCO had issued a show cause notice last year for acquiring the land area transferred to the company for breaching the terms of the agreement.