Port based SEZ gets priority among investors

By SiliconIndia   |   Tuesday, 29 July 2008, 12:33 Hrs
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Mumbai: When government find it difficult to establish more Special Economic Zones (SEZ) throughout India, investors are now turning to port based SEZs, reported The Economic Times. Such kinds of SEZs are being constructed on the premises of the ports.

Consultants associated with such projects opine that hosts of investors are looking at developing SEZs around greenfield ports in different maritime states. "Ports and port-based SEZs seem to be the craze of the times. Investors including infrastructure companies like construction majors and investment banks have been doing the rounds looking at potential projects," said consultants.

According to a consultant with a foreign firm even though there is no market study made on the requirement of port-based SEZs, India needs a couple of them on the east coast and west coast. "But you will have to space them out," he added, perhaps alluding to the crowding of such facilities at various business centers across the country.

Carlos Nasciment, second Deputy General Director, Dinh Vu Industrial Zone, Vietnam, said that he would not recommend SEZs for every port. "Infrastructure is one of the most important factors while deciding on an SEZ. There are other factors like environment, regulations, labour and weather conditions that need to taken into account before deciding a portbased SEZ. One should consider all this going to set up a SEZ and not because of government is providing some incentive," he added.

Complaining that the investors do not have the expertise, consultants say that the government is dithering and has failed to put in a cohesive policy framework. "Its finance and commerce departments, meantime, are haggling about their respective jurisdiction over tariff areas," consultants say.

Although the government has started to promote SEZ before some years, India could not achieve maximum benefits out of such developments. Consultants say that in the context of emerging port based SEZs; government should clarify its stand on SEZs and port-based SEZs and lay out a clear cut policy frame work for their development.

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