TIDCO takes back Nanguneri Special Economic Zone land; company goes in appeal

After cancelling the leasing agreement it had signed with AMRL Hitech City Limited for developing the Nanguneri Special Economic Zone (SEZ) in 2000, the Tamil Nadu Industrial Development Corporation (TIDCO), the co-promoter, has taken back the land from the private firm on the grounds that it failed in developing the SEZ even after 24 years.

 “The lease has been cancelled,” a senior government official in Chennai confirmed.

Sources in the Tirunelveli district administration said over 500 acres of land would be taken-up for development in the first phase. “We cannot say when the work will start... It may take considerable time,” said a source.

However, the government official added, that “AMRL has filed a writ petition challenging the cancellation of lease deeds.”

The foundation stone for the Nanguneri Special Economic Zone was laid in March 2001 with the objective of creating industrial units, residential colonies for workers and entertainment zones on over 2,519 acres on Tirunelveli – Kanniyakumari 4-lane national highway. Back then it was projected that the venture would create employment opportunities for over 1 lakh skilled and unskilled workforce.

However, the objective was never achieved. The US-based INFAC, which was identified by TIDCO for developing this project, failed to do so even after 20 long years. After INFAC withdrew itself from this project, Hyderabad- based AMRL joined hands with TIDCO as the promoter.

In all these years, the joint venture company, AMRL Hitech City Limited, which was floated for executing this project, has so far attracted investment worth only a few hundred crores of rupees and around 700 persons are working in 14 units in the SEZ, which became a multiproduct SEZ in the recent past. The total quantum of export by these units between 2011 and 2024 is a measly ₹792 crore.

The promoter, without the consent of TIDCO, the co-promoter holding 1% share in this joint venture, and in violation of the agreement signed earlier, transferred 58% shares of this project to Kolkata-based SREI Infrastructure Finance Limited in a bid to achieve financial closure for investing in industry-friendly infrastructure at AMRL Hitech City Limited.

Besides, in violation of the Memorandum of Understanding it had signed with TIDCO, the AMRL Hitech City Limited raised loan to the tune of Rs. 855 crore from SREI Infrastructure Finance Limited by mortgaging the lands given to it for developing the SEZ.

Pointing out these violations, Tamil Nadu Assembly Speaker M. Appavu submitted a petition to Chief Minister M.K. Stalin in August 2023 seeking the termination of the agreement signed between TIDCO with AMRL Hitech City Limited for leasing the land for industrial development. Subsequently, the TIDCO terminated the land lease agreement in December last.

Since AMRL Hitech City Limited did not pay the drinking water charges to TWAD Board, drinking water supply to the 14 units functioning in this complex had been snapped. And, the sewage treatment plant is not being operated while the roads and light facilities on this sprawling complex are also in the pathetic shape.

Mr. Appavu informed that the Chief Minister, following the termination of the lease agreement in December last, had initiated steps for retrieving at the earliest the land mortgaged to SREI Infrastructure Finance Limited by the promoter and planned to involve SIPCOT for creating industrial estate at this sprawling well-connected site near Nanguneri.

“It is the most advantageous site in the entire country for setting up industrial units as it is right on the 4-lane national highway and close to the railway station. Three airports – Thoothukudi (45 Km), Madurai (170 Km) and Thiruvananthapuram (100 Km) airports - and a seaport (80 Km) are near this complex. So, it will the investors’ first choice,” Mr. Appavu said.

(With inputs from Sangeetha Kandavel in Chennai)

Published - September 19, 2024 09:53 pm IST