Poor planning hits TN revenue from industrial zone SEZ News
CHENNAI, MAY 16:
The report for the 2010-11 period states that the State Industries Promotion Corporation of Tamil Nadu which creates land banks, industrial estates and Special Economic Zones has over 26,926 acres land in these industrial complexes as of March 2011. But it is able to market a maximum of a little over one-third of the land in five of the eight SEZs formed between 2006-07 and 2010-11.
This shortfall in planning led to a fall in income in its core activity during this period.
During the five years the Corporation's share of income from industrial development went from 67 per cent down to 24 per cent. This was primarily due to poor project management, according to the report.
Though its net profit before tax near doubled to Rs 123.70 crore in the five years, the major potion of the profit was on interest on term deposits, about Rs 309.44 crore. The contribution of interest was about 32 per cent initially and increased to over 86 per cent in 2009-10. Simultaneously, profit from its core activity halved to Rs 28 crore, the report said.
The industries promotion body which handles the release of Government incentives to attract investments has released incentives in excess of the eligible amount. In two specific cases it released an excess of Rs 297.75 crore.
On land cost, the report points out that the Corporation had not taken into account the increases in cost payable to land owners, latest trend in market rates or the extent of saleable area. It lost over Rs 251.76 crore as estimated in the case of cases which were test-checked.
It also did not take back 2,124 acres of unutilised land from 195 entrepreneurs leading to a loss of over Rs 421.56 crore as estimated for about 65 per cent of the land for which pricing data was available. The agency does not also monitor change of management and subleasing by original allottees. The Corporation lost over Rs 136 crore in seven cases where there was a change in management and a portion of the land was subleased.
There was also an imbalance in the location of the industrial zones. Against a plan to set up an industrial zone in each of the 32 Districts, the agency managed to locate a zone in only 13 Districts. Nearly half the land area was in two places, in Kanchipuram and Thiruvallur, close to Chennai.
The industry promotion body had identified 16,399 acres land in six districts between 2007 and 2010 but State Government sanction had been awaited as of November 2011. (EOM)